If you’re ready for the commitment, you bet!
Yes. Buying a home is a big decision. A big commitment, too. 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.
If you’re not sure about making the leap from renter to homeowner, we’re here to help you weigh the options.
Pros of Buying a Home
Build equity
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.
Tax advantages
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.*
Loan options
There are different types of loans to choose from. 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, minimalist 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. No pet deposits needed either!
Important Homeowner Costs to Consider
Although owning your own home provides a certain level of freedom, there are some new responsibilities and costs that you aren’t used to paying and won’t be able to hand over to a landlord.
Down payment
Different loans require different amounts as a down payment depending on your situation. As a renter, you might have to place a deposit, but the cost between the two is vastly different.
Insurance
Property insurance is required. Flood or other types of coverage may also be required depending on your location.
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.
Reasons To Rent
Sometimes, due to your personal situation and long term plans, renting may be the better option. If your situation fits any of the following, it may be best to rent until you’re ready for the different responsibilities homeownership brings.
- 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.
Ready to make the leap from renter to homeowner? Connect with a PrimeLending home loan expert now.
*PrimeLending is not authorized to give tax advice. Please consult your tax adviser for tax advice for your specific situation.
