Many people simply assume that buying a home is always better than renting, but that is not always the case. Owning a home makes sense in certain circumstances, just as renting is a smart move in others.

If you are thinking about buying a home, there are a number of questions you need to ask yourself before you call a real estate agent. Making an honest assessment of yourself, your finances and your goals can steer you in the right direction. So can asking the following questions.

How Long Do I Expect to Stay in the Home?

Over the long run, home prices have appreciated steadily, but short-term price trends are much harder to predict. As homeowners found out in 2007 and 2008, real estate prices do not always go up. Prices can decline quite sharply in just a short time, and that can leave buyers who bought at the top in a very uncomfortable position.

If you are buying a home as a place to live in for the long term, you will probably be quite pleased with its performance in the coming decades. If you are looking for a quick flip, you might be disappointed. You might indeed find a bargain and make a quick profit, but you could just as easily lose money on the deal.

Can I Afford a 20% Down Payment?

Putting a significant amount down on a home can eliminate costly private mortgage insurance and give you additional wiggle room should prices decline in the future. If you cannot make a down payment of at least 20% in the price range you are looking at, you might want to set your sights - and your price - a bit lower.

Stretching to make the mortgage payment and buying more home than you can comfortably afford is a recipe for disaster. If you think you can afford a $200,000 home, looking at properties in the $150,000 to $175,000 can get you more for your money and allow you to sleep more easily in your new bed.

How Much Will the Home Really Cost?

You can find out how much your mortgage payment will be in a matter of minutes. All you need is the purchase price, the interest rate on your mortgage and an online calculator.

The problem is those calculators do not tell you the whole story. Even the most sophisticated mortgage calculator cannot tell you how much your real estate taxes will be in 10 years, or how much you will have to spend for a new roof. Taking home repairs and maintenance into account is a critical part of the equation. If you fail to budget for such expenses, you are putting your financial future, and your home, at risk.

Asking yourself these vital questions can make the decision to buy a lot easier. If you have satisfactory answers to all the above questions, you may be ready for the financial commitment and decades-long responsibility of home ownership. If not, you might want to keep renting and saving money.