To rent or to buy? A financial advisor weighs in on this age-old question

To rent or to buy has long been a question asked by many, naturally because the rental and housing market is continuously fluctuating. While currently, some areas of the U.S. are seeing rental prices drop, they are still largely spiking throughout the country — and homebuying has become the cheaper choice at least in some cities.

Although the answer to this age-old question heavily depends on timing and costs, there's more at play that one should factor into their decision-making. Buying a home is a huge accomplishment, but it's also a huge responsibility. It's important to understand all the pros and cons of homeownership when you decide it's time to stop renting. Financial advisor Sheryl Garrett weighs in on what should be top of mind.

It's important to understand how much of a commitment buying a home can really be. Not only are you paying a mortgage, but you're also responsible for any home repairs, maintaining the property, paying property taxes, homeowners insurance and more. In fact, according to a Bankrate survey, 21% of millennials regretted buying a home because maintenance costs were too high.

The mortgage application process is a commitment in and of itself. Typically, you'll need to get pre-qualified for a loan before you even start looking at homes. And after your offer is accepted, it can take months to wrap up the process, during which time you'll need to be extra careful to maintain your credit score and avoid spending large sums of money until you close on the property.

The complexity and cost of taking on a mortgage makes it important for you find a reliable and straightforward lender in the first place, such as Chase Bank or Sofi. These lenders both provide a streamlined application process and neither saddles you with unnecessary fees or early payoff penalties.

It's hard to ever feel 100% ready to be a homeowner, and sometimes taking a risk even when you're intimidated can really pay off. But if you feel nervous about the long-term financial commitment, you may not be ready to buy a home.

"Buying a home as a first-time home buyer or as a young person is a new adventure," Garrett says. "If you're not 100% certain you want to buy a house, then don't buy a house. It can also be a very emotional process, so if there are any ifs, ands or buts, you aren't committed to buying."

According to Garrett, flexibility is one of the most important factors to consider when deciding whether to continue renting or become a homeowner.

"Think about whether or not you really want to be tied down to a house when you have the opportunity to be more flexible," Garrett says. "There are lots of things that can cause you to change your mind about where you want to be: climate, relationships and even cost of living."

Flexibility can really come in handy if, for example, you value traveling and want to live in different cities. In this case, it probably doesn't make sense for you to anchor yourself to a home in just one location.

Or maybe you're thinking of making a career switch in the next one to two years, and you're open to pursuing opportunities in other cities — this may be another instance where you want the flexibility of renting so you can easily pack up and move for your career when you need to.

Another scenario that can impact where we want to live is climate. Some people may not be so inclined to live in areas known for severe weather — hurricanes, tornadoes, flooding, etc. — in part because insurance can be very expensive. Renting in these areas first can help you figure out if it's a climate you're really willing to endure before you sign on for a mortgage. This way, if you decide that the weather makes your city an extremely difficult place to live, you still have the flexibility to move somewhere else.

It's also not always a great financial decision to buy and the resell a home quickly as there are a number of big costs, from the agent's fees to capital gain taxes, etc. If you want to make sure you make a profit (or at least break even), many financial advisors recommend waiting at least five years before selling.

"Homeownership is one of the biggest financial decisions you'll make," Garrett says. "Don't rush it just because interest rates are low, or because you think you'll miss an opportunity to make money from owning a home."

Before you decide to buy a home — even if you already have a down payment saved — make sure you cover three essential financial bases: First, have an emergency fund with at least three to six months' worth of living expenses saved up. A high-yield savings account (like the Marcus by Goldman Sachs Online Savings Account or the Ally Online Savings Account) is usually the ideal type of account for stashing this money since you'll earn interest on your balance every month even if you aren't making contributions to it.

Then make sure you aren't carrying credit card debt, since it's a high-interest debt that can really eat into the amount of money you have left each month for saving and spending. If you want to aggressively pay down credit card debt a little faster, you might consider using a balance transfer card with an interest-free intro APR period. This way, you can hack away at your balance without paying additional high interest costs. CNBC Select found that the Citi Simplicity® Card (see rates and fees) and the U.S. Bank Visa® Platinum Card are among some of the best balance transfer credit cards available.

And last, make sure you're already contributing enough to your 401(k) account to be eligible to receive employer matching, if offered by your company. Buying a house doesn't mean you should forego saving for retirement. And not contributing enough for the match means you're leaving retirement money on the table.

These steps are, of course, equally crucial even if you'd rather continue renting. Regardless of your homeownership plans, forming these good money habits can strengthen your financial standing over time so you can feel more confident when going after your goals and dreams.

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Information about Marcus by Goldman Sachs High Yield Online Savings has been collected independently by CNBC Select and has not been reviewed or provided by the banks prior to publication. Goldman Sachs Bank USA is a Member FDIC.