With the economy in the shape that it is in currently many people are finding mortgage rates much more inviting than they did several years ago. This is leading them to dive into home ownership much sooner than they expected to. But there are still other people who are waiting to purchase a home until the housing market recovers. Unfortunately, no one can tell us when the time is right to buy a home. That decision is completely up to you. This is where you need to decide if you want to rent or buy your home. Below are some pros and cons of each that should help to make your decision a little easier to make.
Renting A Home
Some might find that renting your home might be the best option for you if you are looking for freedom and flexibility but there are other advantages as well. One of these main advantages is that there is no maintenance required from you. This part is great if you are not a handy person. If something breaks you simply call your landlord and they are required to fix whatever it is. A second advantage is that it is much easier to pick up and move. If your career is requiring you to relocate you can switch to a month-to-month lease or even sublet your home, which is much easier than having a home to sell. A large pro to renting vs. buying is that if the property depreciates in value you can avoid being stuck with it.
Of course where there are process there are also cons. One of the cons with renting is that the amount you can pay monthly can increase. Be prepared that when your lease is expired and you sign another one you might see the monthly amount go up. A second disadvantage is that you do not build any equity when you rent. The only thing your monthly payment does for you is it provides you with a place to live. You will also not receive any tax benefits. Unlike when you own your home you will not be eligible for any tax benefits such as deducting the mortgage interest rate from your tax returns. And one last disadvantage is that you might not be able to paint the walls or remodel therefore if you want to add your personal touch to the home you need to get permission from the landlord first. Many people do not like the fact that they cannot add their own personal touches.
Making The Decision To Purchase Your Home
Homeownership can provide you with some very emotional and financial advantages that will please everyone but also comes with some disadvantages as well. Of course the main advantage is that you will build equity. When your home value rises you will have instant equity if the value does not rise you will build equity as you pay down your mortgage. Another big advantage is that you will be able to take advantage of all of the tax breaks. As a homeowner when you itemize you taxes you can deduct your mortgage interest payments as well as your property taxes. This can help you to offset the cost of your house. A third advantage is that your mortgage payment will not change. If you have a fixed interest rate on your mortgage your payments will remain the same every month. This makes it easier to do a monthly budget.
Just like if you were to rent there are also disadvantages. First if something breaks or needs repaired you are responsible for getting it fixed. A second disadvantage is that you must pay property taxes. This is expected but what is not expected is when your taxes go up. This can make your home not as affordable as it was. And one of the biggest disadvantages to owning your own home is that your home’s value could decrease. This is a hard lesson to learn and many people think that their property value is only going to increase.
As you can see there are many pros and cons to both buying and renting a home. The decision is strictly up to you. It is recommended that you do your research and decide which option would be the best for you financially.
Image credits to : Owen Moore