You have many options to consider and choices to make. Buying a home is a big responsibility, financially and emotionally, and most people want to own a home. Homeownership often is referred to as “the American dream.” Why is it so special? Because, Real Estate is often an excellent investment and perhaps the number one source of wealth-building for families. When you make a mortgage payment, you are building equity – and that’s an investment. Owning a home also qualifies you for tax benefits that may assist you when dealing with your new financial responsibilities – such as homeowners’ insurance, real estate taxes, and upkeep – which can be substantial. Given the freedom, stability, and security of owning your own home, they are definitely worth it! Owning your own home also can be a great source of pride and stability.
Homeownership may not be for everyone. It’s a big financial commitment – starting with the initial shock of your purchase (including a down payment, fees paid to the lender and others) followed by years of monthly mortgage payments, real estate taxes, property insurance and maintenance costs. When you decide to purchase a home, you accept responsibility for paying on these expenses. They are additional costs to your monthly mortgage payment and should be included in your budget estimates. Property Taxes and Special Assessments. Home/Hazard Insurance, Utilities and Maintenance, Home Owner Association (HOA) Fee if applicable.
One of the advantages of renting is being generally free of most maintenance responsibilities and the flexibility of moving almost as soon as you decide. However, by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for your housing repair needs. There are many considerations in choosing between renting and buying:
There are tax advantages to homeownership in both the short and long terms. The mortgage interest and real estate taxes are tax deductible, which allows you to subtract part of your housing related expenses from your taxable income, which could reduce your tax bill. In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant.