While it’s easy to simply re-sign your lease and avoid the hassles that come with moving, there are many benefits to buying a home that should be considered. From ownership pride to tax breaks, owning a home has advantages to renting.
1 – EQUITY
Homeownership automatically builds equity and creates a long term investment. Each mortgage payment increases that equity as opposed to rent which only benefits your landlord. Over time, your home is likely to increase in value, giving you a foundation for financial success. When the time to sell your home is right, the increased value can set you up for retirement or help you make a major investment.
2 – SAVINGS
With the exception of upfront costs such as the down payment and closing, you typically save money by buying a home. Rent not only pays the owner’s mortgage, but can also give them additional income. When you own a home, your monthly payment goes directly to your mortgage without markup and it contributes to your equity.
3 – TAX DEDUCTIONS
Once you purchase a home you may be able to itemize your taxes so that your down payment, interest and property tax are all deducted. These tax savings can put a significant amount of money back in your bank account.
4 – CREDIT
Making mortgage payments consistently on time builds your credit and shows lenders that you are a reliable, low-risk borrower. A strong credit history can help you secure loans in the future for major expenses such as car or home updates.
5 – PREDICTABLE PAYMENTS
When renting, your landlord may be subject to increasing your monthly payments or even ask you to move out with only 30 days notice. Owning a home gives you peace of mind and the ability to budget based on stable costs for as long as 30 years.
6 – COMMUNITY
A sense of pride is established in homeownership, not just in the home, but also the community. As a homeowner, your taxes benefit local schools and infrastructure and you have a say in changes within your area.
7 – DESIGN
When renting, any change to the house must be run by the landlord, but as a homeowner, you are free to make changes as you please. From pets to paint color to remodels, changes are up to your discretion and benefit your home equity.