Pivoting into homeownership is a monumental milestone and it impacts your financial future greatly. While there are advantages and disadvantages that come with either buying or renting, the choice really boils down to personal preference. No matter which path you choose, it’s important to make an educated decision.
Homeownership Benefits
Build Equity
If you’re understandably tired of lining your landlord’s pockets and not your own, the ability to build your wealth over time is hugely appealing. Each month, the mortgage you pay is part interest and part principal, with the latter going directly into your home’s equity. Your home equity will grow on a monthly basis and is money you’re pocketing should you sell. Long forgotten are the days of paying rent and never seeing anything in return!
Tax Advantages*
Even the interest portion of your monthly mortgage reaps you benefits! The fee you pay for borrowing money, the interest, is actually tax deductible. You’re also able to reduce that dreaded tax bill through your property taxes which are also tax deductible.
Loan Choices
Your wish list for your dream home is as distinctive as your financial situation – no two are identical. Because each aspiring homeowner’s position is unique, PrimeLending offers a plethora of loan options and will help you navigate until you’ve found the most compatible.
Live Your Way
Loud roommates, abrupt rent increases and lack of control are all compelling reasons to make the jump into homeownership and leave renting in the dust. Owning your home gives you independence – whether that be letting your imagination soar when it comes to wall colors or getting a pet now that there is no barrier of a pet deposit. The time for settling is a thing of the past when you become a homeowner!
Additional Costs Associated with Homeownership
In addition to the ever-present monthly mortgage, there are other costs associated with home ownership and they’re important to be conscious of.
- Down Payment – The size and type of loan indicates the amount needed up front, however most down payment percentages range from 3.5%-20%.
- Insurance – Every property requires insurance. Depending on where you live, you may require specialized insurance for events such as flood or wind damage.
- Property Taxes – These vary widely depending on geographical location and are set by your local or city government.
- Maintenance and Home Improvement – It might be as simple as replacing a broken lighting fixture or as elaborate as renovating the entire kitchen after fixing that leaky faucet one too many times, but projects around the house can quickly add up over time.
Benefits of Renting
Many people, both older and younger, appreciate the freedom renting provides.
- If you are not invested in your current job long-term or not enamored with the area, renting lets you move with relative ease.
- Financially, you might not be in a place to commit to a home and the related expenses. Renting provides the opportunity to build a stronger financial foundation before buying a property.
- Renting puts the burden of maintenance on your landlord – if a little elbow grease intimidates you, it might be best to let your landlord shoulder that responsibility.
To start the conversation of homeownership, contact us online today!
*PrimeLending is not authorized to give tax advice. Please consult your tax adviser for tax advice for your specific situation.
