<prompt> Human: Let me start with some background info:My wife 26 and I 27 are about to change living situations. Up untill currently we have been living rent free while my parents lived in northern california. We have been renting out all the other rooms in the house in order to stay here. My parents have moved back home and we have released all the renters and my parents dont want us living here anymore. So we have 2 options really. Find a place to rent or find a place to buy.I was laid off last month, construction industry but If needed I could pick up even a low paying position to help supplement. On the other hand my wife makes about 6k per month gross. and about 4k take home.we have saved up 22k Both cars are paid off both are in good conditionCell phones are roughly 70 per monthhealth insurance is about 300 per monthstudent loans 25k are about 300 per month but we overpay and do 600 per month to help pay them down fastershe commutes about 130 miles for work 4-5 days a week and spends probably 300-350 per month in gas.now Rent seems high right now where we currently live and Low near her work. 1400 per month will get you a 1500 sqft 2bed 2 bath here were we live currently or 1500 per month will get you 1000 sqft 2bed 2 bath close to her work to me it makes more since to move close to her work and rent if we are going to rent because she can save money in gas and possibly utilities as its near the ocean and much cooler.If we buy we would be looking for something out where we currently live and she would continue to commute. Homes are fairly cheap avg. 260k for a 3bed 2 bath 1700 sqft home.you couldnt even find a small condo for that price by her work.if we got a loan to buy our interest rate would be high as she is just now repairing her credit from some overdue medical bills and such.based on a small spread sheet i put together. Renting excluding gas and utilitiesgroceries ect. would cost roughly 20k per year. buying at 5.5 interest excluding gas and utilitiesgroceries ect. would cost roughtly 14k per year. after tax incentives. that would be what I consider rent as its going all to interestproperty tax, insurance and PMI. it does not include paying anything to the principle.does anyone have any advice or notice anything i am missing?  <response>: Youre better off renting right now. The average purchase price in Southern California runs anywhere from 300-500k. In order to secure a home loan you will need to put a minimum of 3 of the purchase price down. In a 300k thats 9k on 500k thats 15k. This doesnt include closing costs which can vary between 7k and 15k depending on the loan as well and PMI private mortgage insurance. Assume 1-1.15 for this. You also need to include property taxes. You can lower some of these costs by putting more money down i.e. 5 or higher but you will not eliminate PMI unless you put 20 down, which is extremely difficult for first time buyers. When we bought out home it was valued at 327k. We put 5 down and paid 9k in closing costs. So our total just to get into the house was close to 25k. Even with doing this our mortgage at a rate of 4.5 including property taxes and homeowners insurance is close to 2200 per month. You can only imagine what a 500k home will cost you to get into. 5 down is 25k closing costs etcIf youre a veteran you may qualify for some different programs that can assist you as well. If these numbers are a bit frightening to you I would suggest continuing to save until you feel more comfortable. Also talk to a mortgage broker and real estate agent so you can get a more realistic idea of what your credit will allow you to qualify for. 