Buying a home to build equity is one of the main financial reasons prospective buyers jump into the market, but many people also yearn for the satisfaction of homeownership. However, buying a home isn’t for everyone and it’s important to know the benefits of owning a home vs. renting to determine the right fit for you. Some people believe that the benefits of renting outweigh those of owning a place while others feel the complete opposite way.
Reasons to Rent vs. Reasons to Buy
Here is a list of advantages you should take into account as you consider different places to rent or purchase.
Renting
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Flexibility
By not being locked into the equity of a home, you can explore different areas without committing to just one and have the flexibility to react more quickly to unexpected career or income changes. -
Improving your Credit
By making on-time rental payments and building a positive credit history, you can build the credit you need to get pre-approved for a mortgage. -
No Maintenance
Household maintenance is the responsibility of the landlord. -
Incidental Expenses
When renting, many utilities may be covered by the landlord such as water, sewers or cesspools, garbage and, in some cases, heat and electric.
These are all positive aspects of renting. However, it’s vital to be aware of unpredictable rent fluctuations. This can often make long-term planning and budgeting more difficult.
Buying
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Pride of Ownership
Having your own home to enjoy with family and friends creates unparalleled pride. And with the help of a top mortgage company like Contour Mortgage, your dreams of purchasing a home can easily become a reality. -
Creative Control
Feel free to paint or remodel as you wish to make your house into a home. -
Equity
With every mortgage payment, you may increase the degree of ownership in your home. Also, you can borrow against your ownership (or equity) in the home to pay for major purchases, refinance your home at favorable rates, or once you’ve paid the entire mortgage off, borrow to fund major purchases like a second home or a child’s education. -
Tax Deductions
As a homeowner, you may deduct mortgage interest as well as your property taxes. (Consult a tax advisor about deductions.)
Whenever you’re planning to make a major financial decision, such as moving to your own place, the importance of properly choosing what path is right for you cannot be stressed enough. Though renting does have its advantages, it can be difficult to save money to eventually purchase your own place. And while owning a home can be a great investment, there’s a lot more responsibility in terms of upkeep. Be sure to take the time to figure out your best move before you actually move.
