Owning a home—is it really all that it's cracked up to be? The truth is, there are many reasons you may feel ready to buy, whether you need more room or are simply ready to settle down more permanently.
Whatever the case, here are seven reasons for becoming a homeowner.
It's the most obvious, tangible reason for homeownership—the equity that you build. When you rent, you pay toward your landlord, and the money simply checks a box. When you own, you're paying back toward a mortgage in equity that you can later borrow against for home improvements, unforeseen maintenance and other major expenditures. Equity in a home can be a powerful financial tool—but you have to buy in order to build it.
2. Interest Credit
Buying a home means paying principal (the original borrowed amount) to your mortgage account. It also entails paying interest to your mortgage—and this interest paid can be a benefit come tax time. The interest portion of your mortgage typically is higher at the beginning of your repayment schedule, so claiming a portion of this interest paid in your year-end taxes can potentially add a bit to your return amount.
Have you stumbled upon a community you love and a job you could see yourself doing for quite a while? Sounds like this is a good time to consider buying a home. Investing in a property in a city or region you could see yourself living in for a long time is a smart move, especially if you have a stable household income to back it up.
4. Resale Value
Renting comes with a host of perks—but one key benefit of owning versus renting is the potential for resale income. Your property value may appreciate over time if you make renovations or spruce things up inside and outside your home. Your house may also become more valuable in a seller-friendly market. Owning a home may all you some day to sell the property for more than you originally paid for it, providing additional income that could be used toward paying down bills or a downpayment on a new home.
There is an assumption that typically monthly rent is less expensive than a monthly mortgage payment. However, this isn't always the case. In fact, according to a study from Zillow, the average U.S. monthly home payment is about $1,015, while the average monthly rent is nearly $1,500. Depending on where you live and affordable housing options, you might actually save money by buying.
When you re-sign your lease on your apartment or rental home each year, the property manager is generally able to increase the cost of living upon lease renewal. Not so when it comes to a fixed-rate mortgage—you lock in an interest rate and a subsequent monthly payment, and it stays the same (barring no increase in property taxes or insurance) for the life of the loan. This offers your budget a more predictable way to pay for your housing.
If you have a decorative spirit, a rental property may come with too many restrictions—from painting walls to hanging frames to implementing your own unique fixtures, apartments can often restrict your flexibility. When you own a home, the space is yours. As long as you abide by city building codes, you can choose your own wall colors and decorate your way.