Does a life with stable monthly mortgage payments, investment opportunities, no landlords and the opportunity to personalize your space to your heart’s content sound like something you’d be interested in? Then leaving the rental life behind and buying a home may be right for you!
As mortgage professionals, we are often asked for advice from potential homebuyers regarding the age-old housing question - should I buy a home or continue renting? The answer is….it depends! The decision is a highly individual one that depends on a number of factors, such as local housing market conditions and personal financial stability. But for many potential homebuyers, owning a home is a smart financial decision that helps build wealth, contributes to everyday happiness and provides additional lifestyle benefits.
Here are some of the pros of pursuing the American Dream of homeownership:
• Equity - When you write a rent check, that money goes into your landlord’s pocket. When you pay your monthly mortgage, a portion of that payment goes toward paying the loan down, giving you more equity in your home. Equity, an important financial tool and one of the greatest benefits of homeownership, is the difference between what you owe on your mortgage and what your home is currently worth. Your equity will increase as you pay down your loan and also increases when the value of your home rises. You can tap into your home’s equity to pay for a major renovation, pay for your child’s college tuition or eliminate debt!
• Tax Benefits - While homeowners do pay property taxes, these are tax deductible when filing your yearly tax return. Homeowners also are allowed to count mortgage interest as a tax deduction! These savings can make owning the same as, or cheaper than, renting.
• Appreciation - Depending on the market and how well you take care of your home, its value will likely increase over time. This means if you invest in a home with good bones in a good area of town, there’s a good chance your investment will pay you back + extra!
• Freedom to renovate - Interested in trying out a trendy paint color or knocking down a wall to create an open-concept feel? As a homeowner, you have the freedom to make renovations without having to ask for permission from a landlord. As an added benefit, these renovations often contribute to the overall value of your home.
• Privacy - If you’ve lived in an apartment before, you probably have a noisy neighbor story to share… or, maybe you were the noisy neighbor? :) Either way, when you own your own home, you can be as quiet or loud as you’d like to be. Ah, what a feeling!
• Emotional Benefits - A home provides stability and gives your family a space to make priceless memories together. In a 2019 study by the Bank of America, 88% of homebuyers believed buying a home was “the best decision they ever made” and 93% said that "their lives have been happier because of homeownership”.
While the benefits of homeownership are many, renting can a good solution for some people. Short-term leases provide increased flexibility, and maintenance is taken care of by a landlord who is just a call or text away. As a renter, you aren’t paying additional costs homeowners incur, such as insurance and property taxes, but you will pay for renter’s insurance, non-refundable deposits and up-charges like pet fees and washer/dryer fees.
If you’re interested in becoming the landlord of your own home, we’re here to help. Our mortgage professionals are experts at helping buyers navigate the path to homeownership. Call 508-986-6100 or by email at email@example.com to speak with a local loan officer today. To apply for a mortgage click here.