Here are some of the advantages of owning a home:
- Your monthly house payments build equity and lead toward home ownership.
- With a fixed-rate mortgage, your monthly payments will remain the same for the life of your loan.
- Your mortgage interest may be tax-deductible. Property taxes and mortgage points may also be deductible; consult your tax advisor. (See Mortgage Points in “Mortgage Application Fees” section.)
- If your home increases in value, you can make a profit when you sell.
- A home can be passed on to children or other family members.
- Home equity (the amount of loan principal you have paid off) can be borrowed against to finance educational expenses, home-improvement projects, small-business startup costs or other needs.
- You can make changes or home improvements as you wish.
- A landlord can’t decide to sell your house and force you to move.
Why rent instead of buy?
- Monthly payments may be lower than mortgage payments. Use this mortgage calculator to determine what your mortgage payments may be.
- Compared with a mortgage, a lease is a short-term commitment.
- Someone else performs (and pays for) repairs.
- Rent payments may cover appliances, furniture, utilities and even cable/internet.
- No significant down payment or loan closing costs are required to start renting.
- Landlords might not scrutinize your credit history the way mortgage lenders will.
- Rent payments that are a few days late typically won’t hurt your credit score.
- It is easier to get to get approval for a lease than to get approved for a mortgage.
- There’s no investment risk if the housing market changes.
- You may be able to avoid home insurance premiums or association fees.
Seeing how much house you can afford is a good first step toward making the decision on whether to rent or buy. Use this home affordability calculator.
Learn more here about the benefits of being a homeowner.