Is Owning A Home Better Than Renting?

December 7, 2015

Rent versus own home

Renting

  1. Lower Payment-Your current rent may be lower than a mortgage payment on a home but rents are starting to skyrocket across the country. Also, you may be able to afford a higher mortgage payment because you should be able to take tax deductions on the property taxes and loan interest you pay every year which will give you a lower after-tax mortgage payment. For example, if your tax bracket is 20% and you pay $1,000 rent that is the same as paying a $1,200 mortgage payment.
  2. No Maintenance-Your landlord is suppose to fix things and upkeep the place you live in...right? In reality, landlords do the bare minimum to make tenants happy and they don't re-paint a room for you if you don't like the color.
  3. Easy To Move-If your landlord decides not to renew your lease or jacks up your rent then your decision to relocate is made for you. Also, your landlord may decide to sell the home your are living in and you are forced to move elsewhere without much notice. Sometimes landlords don't pay their mortgage and pockets the cash from rent. You may be shocked when the town sheriff shows up at your door to evict you and you need to pack up in an hour or your stuff ends up on the street.
  4. Make Your Landlord Rich!-You are paying the mortgage on his property not yours and you will have nothing to show for it. Your landlord wants you to keep throwing money away and he is more than happy to have you as a "lifer renter" until he decides he doesn't need you any more...knock..knock!

Owning A Home

  1. Tax Advantages-You should receive tax breaks on the property taxes and mortgage interest you pay every year which gives you a lower after-tax payment on your mortgage. If this payment is about the same or lower than your rent then buying a home should be a no brainer. Check out Home Affodability Calculator to determine how much house you can afford and maximum mortgage payment or Rent vs Buy calculator to determine if homeownership is right for you.
  2. Build Wealth-We have had a Great Depression, recessions, and a recent housing crash but home values have consistently gone up over time and you will most likely beat the rate of return for a savings account at the local bank. Also, every payment you make on a mortgage reduces the outstanding principal on your loan which increases the equity you have in the home.
  3. Build Credit-On-time mortgage payments will improve your credit history and scores.
  4. Pride of Ownership-The number 1 reason why people buy a home is pride of homeownership. You don't have to abide by your landlord's rules and if want to add a funky paint color to your bedroom walls you can do it without his permission. Also, schools are usually better in residential areas and people feel more secure and stable when they own a home.

So, go ahead and pursue the American Dream of owning a home and get pre-approved today or contact us at 847-516-5743.