By Maggie Gebremichael, eHow Contributor

The decision to rent or buy a house depends on your financial

situation and long-term objectives. You may have found the perfect house, but the ideal location, size and price alone are not good-enough reasons. You should buy a house when you are financially healthy. If you have a lot of debt, including credit cards and student loans, then you should pay off your debts before acquiring more. If you will not be staying put for a long time or if you do not have a savings cushion, then you should rent until your financial situation improves.

Monthly Cost
- When evaluating whether to buy or rent, you must thoroughly consider likely expenses. For instance, if you rent an apartment, you must pay the monthly rent -- plus utilities, unless they're included in the rent. Renters usually do not have to pay maintenance fees as the landlord is responsible for most repairs. Homeowners must pay their mortgage and utilities, which may be similar to rental costs. However, if you buy a home, add a few thousand dollars annually to cover taxes, insurance and maintenance costs.
Credit History
- Your credit will be checked when you complete either a rental or mortgage loan application. Your credit history will impact your financing options if you need a mortgage to purchase your home. However, your credit likely will not change the rental price for an apartment. Thus, if your credit is nonexistent, weak or bad, you should wait to buy a house until your credit improves.
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Savings
- If you do not have sufficient savings to provide a down payment and cover your monthly expenses for six months, then you should rent. To achieve a goal of owning a home, bolster your savings in order to purchase a home wisely. Interest-only and adjustable-rate mortgages (ARMs) should be avoided like the plague as you will make insignificant payments toward your principal loan, thereby remaining in debt longer.
Considerations
- Be creative yet realistic about available options. If you are not ready to buy a home, though you need additional space, consider alternatives, such as renting a townhouse. Get a second job so that you can increase your savings.
Time Frame
- There are different durations for rental agreements vs. mortgages. You might sign a three-, six- or 12-month lease if you rent. However, the process to close on a house takes some time, so you will not be able to enter into a mortgage, then turn around and sell the house after a few months when you need to relocate.