Owning vs. Renting
Owning a home is part of the American Dream. It means establishing roots and having a space you can truly call your own. In addition, research shows that owning your home has significant advantages over renting. However, you may still wonder if buying a home is right for you. There are many benefits to owning a home that are not included for renters. Here are five top reasons why owning your own home far outweighs renting.
Pride of Ownership
Renting a home does not come with a lot of options to modify your living space. Owning means you can paint the walls any color you desire, tear down a wall, remodel the kitchen or bathroom, and landscape your very own backyard without asking for permission. Home ownership gives you the freedom to create your very own space and make improvements, which leads to an increase in your home value.
Tax incentives for homeowners are offered by the federal government. Homeowners have the option to deduct the interest from their mortgage payments on their income taxes. In addition, certain home related purchases and private mortgage insurance (PMI) payments also qualify for tax benefits.
Owning a home is an investment, whereas renting has little to no ROI or return on investment. Unlike owning a car, which decreases in value, a home purchase will increase over time. Although certain housing markets are unique, most national median home prices continue to rise every year, even in times of recession. As you continue to pay your mortgage every year, the debt amount of your loan will decrease, and the value of your home will continue to rise.
Mortgage Payments are Stable
No landlord to increase your rent! Choosing a fixed-rate mortgage means you will generally have the same payment amount for every month you own your home (usually 30 years). As monthly rental payments increase over the years, your mortgage payment can remain fixed for the duration of your loan.
Every month, a portion of your mortgage payment is applied to the principal balance of your loan, which increases the equity in your home. This means an automatic savings every month, not to mention the amount of your down payment. It’s like a forced savings account that will no longer go into the pocket of your landlord.