The question of whether it is better to buy or rent a home has long been a topic of debate, and the answer depends on so many factors that there is no single answer that applies to everyone. Both options have their advantages and drawbacks, and it is important for people to weigh them before making a decision.
The Pros Of Buying A Home
Here is a look at some of the biggest benefits of homeownership.
It Is An Investment And An Asset
When purchasing a home, it becomes yours and it is considered one of your assets. In the future, you may rent or sell it as you wish, and once your loan has been paid off, you take full ownership of the property and must only worry about paying your homeowner’s insurance and property taxes.
You Can Modify It As You Please
When you own a property, you can make whatever changes you desire as long as they do not violate any restrictive covenants in the deed or regulations set by your Homeowners’ Association. This means that you may add on rooms or entire floors if you wish and remodel to make the home exactly how you want. This is something that people who are renting are unable to do.
You Can Get A Mortgage Interest Deduction
It is possible to deduct 100% of your mortgage interest paid throughout the year on your taxes. In other words, all of the interest paid on your mortgage is considered tax-deductible and can amount to thousands of dollars in savings.
The Cons Of Buying A Home
Here is a look at a few of the drawbacks of homeownership.
One of the biggest drawbacks of owning a home is that you are responsible for all of its maintenance. Not only do you have to make arrangements to solve emergencies like plumbing leaks and electrical breakages, but you will also have to pay for repairs. Some of these repairs, such as those to the foundation or roof, can be very expensive.
Uncertainty In The Housing Market
When you eventually decide to sell your home, it often ends up being worth more than what you paid for it.
However, in some cases, it may be worth less or you may not have enough equity to cover the closing costs and real estate agent fees in addition to paying off your mortgage. In that case, you may have to pay for the difference out of pocket.
The Pros Of Renting
Here are some of the biggest benefits of renting.
Low Maintenance Expenses
if you are renting and something needs repaired, it is generally the responsibility of the owner of the property. This means you do not have to worry about paying for problems like a leaky roof.
Keep in mind, however, that some leases have special clauses that make the renter responsible for certain repairs or give landlords the right to raise rent to cover such costs, so it is important to read your lease very carefully before signing.
When you are renting, you generally have a lot more freedom than you would if you owned a house to pack up and move when you switch jobs or feel like a change of environment. As long as you have not signed a very long lease, you can move with relative ease for whatever reason, whether you want to move closer to family or you are simply tired of the layout of your apartment.
As a homeowner, however, you would have to wait to sell your house before you could move. This could take a significant amount of time depending on the housing market and your property’s location.
Lower Costs Overall
Although some rental prices may be comparable to a mortgage payment in some areas, renters do not have to pay some of the fees that would be involved in purchasing a house, such as closing costs and insurance.
The Cons Of Renting
Here are some of the biggest drawbacks of renting.
You’re Paying For Another Person’s Asset
When you rent someone else’s property, you are financing their investment. You are the person paying for their mortgage and property taxes, yet they are the ones who own the property and can benefit from selling it when they wish.
On a similar note, your landlord may choose not to renew your contract, which means you will find yourself having to search for a new place to live. Your rent prices could also rise at the end of your contract.
You Cannot Make Major Changes To The Property
When you are renting, you are unable to make extensive changes to the property that could improve your quality of life. If your landlord does approve of certain upgrades, you will not be able to recoup that investment later because the house is not yours to sell.
In many cases, renting is a better option in the short term, but buying works out better in the long term. If you know that you will be staying in your area for a long time and you are prepared for the responsibility of homeownership, it often makes financial sense to purchase a home instead of renting one.
Reach Out To The Professional Mortgage Brokers
If you would like to explore the possibility of buying a home, get in touch with the mortgage brokers at My Lending Pal to learn more about the options and find out whether homeownership makes sense for you financially.