Deciding to become a homeowner is an exciting time. You may be realizing a lifelong dream, seeing the fruits of your labor, or embarking on a new life adventure. As you ask yourself “Should I rent or buy a house?”, remember there are both good and bad sides to owning your own property.
You can increase the equity of your home as time goes on by paying down your loan balance and putting work into the property. Your home may appreciate over time, making it valued much higher than when you initially bought it.
Renting does not allow you to put money towards a long-term investment like you do with a home you own.
Are you the type of person who likes to change up their life’s scenery often? Are you looking forward to a major career or life change that could call for you to relocate?
If so, owning a home is not your best bet. Purchasing a home locks you into an investment that is not easy to get out of.
While rental leases can last for anywhere from month-to-month to a year, a home is a bigger commitment you’re better off staying put with.
When you rent you are at the mercy of a landlord who will dictate what you’re paying and may have rules pertaining to what you can and cannot do in your living space.
When you own a home you get to make the rules and can rest easy knowing there is no other entity looming over your head that could pull the rug out from under you at any moment.
Stability also comes in the form of monthly payments. A landlord can change your rent, but a fixed-rate mortgage loan means you pay the same principal and interest for the duration of the loan.
On the other hand, having a landlord is nice because if something breaks they most often are the ones to pay for a repair. They also handle facilitating said repair.
If you own a home you are on your own when it comes to unexpected breakages and expenses.
There are many perks when it comes to taxes.
Mortgage interest is deductible on the first $750,000 of the purchase price of the home. This is also true for property taxes up to $10,000 if you’re married or $5,000 if you’re married and filing separately.
It may also apply to certain closing costs.
Buying a home is much more than having a monthly mortgage payment; there’s a lot to save for.
You’ll want to put money aside for a sizable down payment, the minimum of which is typically 3.5 percent of the home’s purchase price.
You will also get hit with closing costs, expenses incurred that complete your real estate transaction. These costs typically make up 3 to 6 percent of the home’s purchase price.