It’s that time again – time to dig deep and ask yourself that age-old question: “Should I continue to rent, or should I take the leap and become a homeowner?”
If we’re being honest, buying a home just makes sense, especially in this market. Interest rates are at a historic low, many lenders are offering fantastic options for buyers, and we are moving into a season that typically has less competition. As with any big decision, there are pros and cons to both buying and renting, but at the end of the day, it really boils down to personal preference. So let’s dive in and look at some pros to home-buying over renting.
When you own your home…
- You’re building equity. As we all know, when you rent, that money goes to the homeowner/landlord. When you buy a home, each monthly mortgage payment reduces the amount you owe on your loan, thereby building your equity. You can also build equity when your home increase in value. So the bottom line here: wouldn’t you rather make a payment every month that contributes to your own finances rather than someone else’s?
- You have the freedom to customize. When you’re a homeowner, you’re free to create the home you want. If you want to paint every room in your house bright green with red trim, you can do that and no one can stop you! (I’m not sure why you would do that, but hey, to each their own. We’re not here to judge.). If you’ve always wanted to get a dog, but your landlord would not allow it, well… you’re free to get a dog in a house you own! Whatever your heart desires, you can create the home you’ve always wanted.
- You’re building a strong credit history. When you make that on-time, monthly mortgage payment, you demonstrate not only financial responsibility, but that you are a low-risk borrower. Why is this important? Let’s say you consistently make your payment the first of every month, but now you need a new car. When you go to the dealership and they pull your credit, they will see that you are a good borrower and a great candidate for another loan. Or let’s say 15 years down the road, you want to make significant improvements to your property. Again, a lender will pull your information and see that you’re a good candidate. In other words, a strong credit history gives you provides more security for the big things you need (ie. various types of loans!)
- Your monthly payment should be stable. When you lease, there is no guarantee that your rent will remain the same for as long as you live in that space. In fact, rent generally increases over time. When you own a home with a fixed-rate mortgage, your payment will stay the same over the entire loan period. This provides reassurance to the homeowner, which means no second-guessing, and can allow you to create a consistent monthly and/or annual budget.
- You can deduct on your taxes. There’s actually quite a bit to this point, but the bottom line – when you own your home, you can deduct certain expenses, interest on HELOCs and home equity loans (if those funds are used to improve the home significantly), and deduct up to a certain amount in local and state taxes (including property tax!).
There are even more positive points to be made with buying a home. However, for the sake of transparency, it’s important to remember things like upfront costs (ie. closing costs), home maintenance and upkeep, taxes, other various costs (ie. utilities), etc. But at the end of the day, if you’re willing and able to take the leap, not only are you contributing towards your future, but you have the pride in homeownership – a place of the world to call your own. And most would say it’s worth it.
Are you a homeowner? Tell us what you love about owning your own home! Are you in the market to buy, but are not sure where to start? Reach out and let us help you navigate the process! – – – firstname.lastname@example.org | 804-353-1250