There is a great deal of discussion about whether it is better to rent or own a home. Many people feel that, since the market is in a great place right now and mortgage rates are still low, owning beats out renting. The truth is everyone’s situation is unique, and there are pros and cons to each. If you are considering purchasing a home, but unsure if you are ready to give up the renter’s lifestyle, then consider the following factors:
Benefits of renting
Renting comes with a sense of freedom and flexibility. If you rent your space, then you aren’t responsible for many of the expenses associated with it, such as repairs and maintenance, which also include the home’s exterior, yard or any piece of connected property. Many of these costs require having your finances in order in the event something goes wrong, as needed repairs tend to be costly and unexpected.
“Owning a home costs money, but it comes with great reward.”
Additionally, Zillow highlighted that renting a home provides you with more flexibility, allowing you to consider various areas, or even try them out, before purchasing and making a commitment. This flexibility also comes in the form of a career. Whether you have a full time job, are looking for a new job or maybe are just on the fence about a new career path, renting allows you to take a bit more time in these decisions.
Think of renting as be preparation for purchasing a home – a time to build up finances and credit. When you apply for a mortgage, having great credit will simply provide you with more loan options.
Benefits of owning
Purchasing a home can be an excellent investment. If you plan on living in the same place and feel comfortable with your finances, then purchasing a home might just be the right move for you.
When paying rent, you are giving money to a landlord. While it is up to that person to take care of maintenance, your monthly rent is not something you are going to see again. As a homeowner, think of mortgage payments as increments you are paying back to yourself. At the end of the day, you are seeing a return on your dollars – your home! Rent payments don’t go toward building equity in your residence like a mortgage payment does.
In many instances monthly mortgage payments are cheaper than rent payments, largely due to location. According to a recent survey conducted by RealtyTrac, average monthly payments on a medium-priced home are more affordable than average rent payments in 76 percent of U.S. counties that participated in the survey, as reported by HousingWire.
“From a purely affordability standpoint, renters who have saved enough to make a 10 percent down payment are better off buying in the majority of markets across the country,” said Daren Blomquist, vice president of RealtyTrac.
Additionally, one of the biggest draws for young homeowners is to learn that there are tax incentives associated with owning a home. You have the option to deduct items such as mortgage interest and property taxes. Also, these tax considerations aren’t limited to one type of housing, but can be available for many types of homes you are considering purchasing, whether it is a town house, condo, single-family home or other style of residence, as noted by Bankrate.
According to Forbes, tax deductions on the interest from mortgage payments can be a huge deduction for many people, as mortgage interest tends to be a large part of the monthly cost in early years of payments. Similarly, these deductions include property tax as well, which you as a homeowner will now be able to claim.
Up to you
At the end of the day, you need to be sure you are prepared when purchasing a home. If you are prepared, both mentally and financially, have a lender you can count on and found the home of your dreams, then it is a great time to move forward with purchasing a home.
Owning a home needs careful consideration, but it comes with great reward. Talk to a lender and a real estate agent today to see if purchasing a home is right for you.