The decision whether to purchase or rent the place in which you’ll live is a major one. Bear in mind that it doesn’t merely affect the amount of money you have left at the end of the month; it affects your lifestyle and the savings you accumulate as well. Here’s a list of benefits to help you decide whether homeownership is sensible.
Considerable Tax Deductions
Homeownership can decrease the amount of income taxes you pay annually. This is because your property tax and interest payments may be deductible from your federal taxes and several state taxes.
You’ll discover that some loan discount points and closing costs may also be tax deductible. In the initial mortgage years when interest signifies the bulk of your monthly mortgage payment, these deductions can put a considerable amount back into your pocket.
Payment Stability
Most lease agreements last between one and two years before renewal takes place, possibly with an increase in rent. You’ll even find that numerous landlords increase the rent annually as permitted by the law.
Even though mortgage rates aren’t always steady, you can opt for 5-year fixed terms. In this case, you’ll know the precise amount you must pay during that period, making it a stable option.
Space Customization
If you’re a renter, it can be difficult to make minor changes to your rental’s décor. Furthermore, even if you’re able to change light fixtures or paint, you typically have to restore everything to its initial state before moving out.
On the other hand, homeownership provides tremendous freedom to create your desired living environment. Therefore, if you need to redo your bathroom or knock down a wall to make a bigger master bedroom, you can do so without worrying about the loss of your security deposit.
You can also own pets, make changes to the flooring and carpeting without obtaining approval from a landlord.
Family Stability
When you purchase a home and make it distinctly your own, you set the stage for decades of memories and significant get-togethers.
Furthermore, the feeling that comes with homeownership and watching your family grow is immeasurable. You’ll also have a source of monetary security later in life when you’ve cleared the mortgage payments.
Build Credit History
When you purchase a home and make your monthly payments in a timely and consistent manner, other lenders perceive you as a good borrower.
You’ll also demonstrate a low probability of defaulting on a loan. A solid credit history will be beneficial in the future when you require other loans for purchasing a vehicle, making home improvements, or paying other major costs.
Less Costs over Time
Purchasing tends to be cheaper over the long term even though mortgage payments may initially be more. You’ll end up spending less over the loan’s life if you buy than if you rent.
Home ownership is a better option because real estate values frequently increase over the years and you’ll own a valuable asset once you complete the payments.
Equity
When you deduct the amount you owe on your loan from your home’s total value, the left over amount is your home equity. Bear in mind that you generate more equity as your home increases in value.
Essentially, mortgage payment is a type of savings because it increases your home equity, which you can access if you require money in the future.
Final Thoughts
Buying a home is one of the biggest economic decisions you’ll make in your life. Therefore, before taking this route, consider the benefits and drawbacks of homeownership. If you’re still undecided about the decision, this guide will prove helpful.
For more benefits of ownership over rental, contact us at Apartment Agents or leave a comment.