Buying vs. Renting
Should you stop renting and buy a home? If you’re ready for what some call The American Dream - you bet!
Buying a home is a big decision and a big commitment. But if you think it through, clearly understand your financial situation, and you’re ready for the short- and long-term responsibilities, it can be one of the most rewarding decisions you’ll ever make.
Why Buying a Home is a Good Idea
Every monthly mortgage payment you make is part interest and part principal. The principal is what you owe on the loan and it goes directly towards your home’s equity. It’s like investing in yourself. Which is a lot better than 100% of your rent payment going to the landlord. Plus, whenever home values increase (and historically they do) so does the value of your home.
The interest portion of your monthly payment is like any other interest. It’s the fee you pay for borrowing the money. However, the great thing about mortgage interest is it’s tax deductible. And so are your property taxes.*
There are different types of loans to choose from. So depending on your financial situation, and long and short term plans, you can apply for a mortgage that will fit your needs.
Live your way:
Do you feel comfortable in a sparse, minimalistic space design? Or do you like different colored walls and pictures everywhere? As a homeowner, you’re free to live, decorate and change your home however you want.
Important homeowner costs to consider.
Down payment: Different loans require different amounts.
Insurance: Property insurance is required. Flood or other types of coverage may also be required.
Property taxes: Varies widely. Determined by local city or county government.
Maintenance and home improvement: From a leaky faucet to new paint, you don’t have to fix everything yourself, but paying for and getting it done is your responsibility.
Why it's a Good Idea to Keep Renting for Now
Sometimes, due to your personal situation and long term plans, renting is currently a better option. You anticipate a change in employment or income in the near future. You’re not comfortable making a long-term commitment to a particular location or area. You need to build a stronger credit history. You’re not prepared to handle responsibilities like leaky faucets, paint and other routine maintenance. You’re not financially ready to cover monthly and yearly costs for utilities, insurance and taxes.
*Everyone’s tax situation is different. Please consult a professional tax advisor.