Buying a home is one of the biggest decisions an individual or family will make throughout their entire life. Prior to the financial crisis of 2008, one of the main financial motivations to buy a home was to build equity. However, times have changed quite a bit over the last 8 years. First-time homebuyers are looking very closely at the costs and benefits of this huge, life-changing transaction.
While there are a few people who jump right out and admit that they’re much happier renting, the majority of us still want to become a homeowner. It’s all about the freedom that comes along with owning your own home; not dealing with that pesky landlord, putting up whatever art you please, and not dealing with the rent hike when that’s sure to come when renewing your lease.
Let’s take a look at both sides of this hot debate!
Why Should I Rent?
Bad Credit: In need of some credit repair? Making on-time rental payments will help you build better credit, which will help you when qualifying for a mortgage.
No Maintenance Required: When your washer or dryer needs repairs, it sure is great when the landlord has to foot the bill. More money in your pocket.
Utilities: In some cases, your landlord may pay for most of your utilities such as water, garbage, and sewer. You’ll most likely be covering your electric bill, unless you have a top-notch landlord.
Career: If you’re contemplating a job change that would require a move, you might want to rent. There’s no need to get tied down to a specific location for your future job search.
Why Should I Own?
Equity: My least favorite part about renting is knowing that I am paying my landlord’s mortgage and adding equity to his or her bank account. If you’re planning on staying put for at least five years, the costs of purchasing the home are likely to be offset by gaining equity. Remember, if interest rates drop, you always have the option to refinance into a better rate.
Tax Deductions: You’ll be able to deduct your mortgage interest as well as your property taxes. Of course, please consult your tax advisor!
Get Creative: It’s time to get creative. You can now paint your walls whatever color you want. Do you love having all of your sports memorabilia on display? Well, you can now start hammering away and get that signed Gordie Howe jersey up on that wall!
There are many different factors that go into the overall costs of renting versus owning a home. It depends on the current market, where you decide to live, and whether you like DIY or home improvements.
Mortgage rates are still at historically low levels and should remain favorable for the near term. If you’re in the market to buy your first home and need a bit more information, click here or give our qualified mortgage experts a call at (877) 706-5856.