Financial Education
Whether it’s because you want to raise a family, invest in a property or avoid dealing with a landlord, there are plenty of reasons to become a homeowner. But if you’ve only known what it’s like to rent, you may be unsure if owning a home is right for you. Read on to learn about the advantages of purchasing a home versus renting a property:
You can build equity
When it comes to homeownership, equity is the fair market value of your property subtracted by what you still owe on the mortgage. This is the value you could actually receive if you were to sell your home. You can also borrow against your home’s equity, using it to help pay for expenses such as home renovations, college education or unexpected emergencies. In contrast, renting a property doesn’t build any equity.
You have more stability
When you’re a renter, you’re subject to the agreement set by your landlord. They may decide to raise rent at unpredictable times and you may not be able to count on them for timely repairs or any upgrades. As a homeowner, you can opt for a mortgage with a predictable, fixed monthly payment. However, you may face unexpected maintenance expenses, so you shouldn’t count on entirely consistent costs each month while paying your mortgage.
You have more freedom
Owning a home means everything is yours to change to your liking. You can redesign your kitchen, landscape your property and, in general, alter just about anything. As a renter, you may be able to make small changes like painting walls, but most elements are generally up to the landlord to change.
You have tax benefits
Even though recent changes to the tax code have limited the extent to which homeowners can utilize tax benefits, there’s still plenty to like. Homeowners are still able to take tax deductions such as the mortgage interest deduction and property tax deduction, potentially saving thousands of dollars each year. As a renter, you don’t receive any such benefits for federal taxes.
There are even more benefits!
As a homebuyer, especially a first time one, you could qualify for benefits that make homebuying easier. Check with the official government websites for your state, city and community for information on housing grants and programs that may be available to you. At PeoplesBank, we offer first-time homebuyers mortgages with low down payments and they’re insured by the Federal Housing Administration. View our full offering of mortgages with a variety of terms lengths and competitive rates here.