Renting versus owning a home

Renting versus owning a home

Have you ever considered owning a home?  Are you currently renting?  While owning a home isn’t right for everyone, here are some things to consider if you are thinking of owning a home:

Most times you can pay the same, or even less, while building equity.  In addition, you may be able to save on your federal taxes by deducting the interest paid on your mortgage.

Pro’s:

  • Build equity — your wealth will increase as you gain more home equity
  • Gain tax advantages — mortgage interest is tax deductible as per IRS code
  • Stabilize your payments — monthly payments are relatively steady if your loan has a fixed interest rate, while your landlord can increase the rent
  • Have a secure place for your family to live — a home provides a permanent place where your family can live and grow, and you can decorate or expand a house the way you like to create your dream home
  • Gain a sense of community — homeowners often are more involved in the well-being of their communities; many homeowners work together for better schools and less crime.

Con’s

  • Maintenance costs — it takes work and money to keep a home in good condition
  • Ties up your cash — selling the house may not be possible during the first few years of ownership; moving is more difficult and complicated and you may not have as much flexibility in choosing a new job location
  • Can fluctuate in value — there is no guarantee that your home will increase in value; it could decrease in value
  • Obligates your finances — when you buy a home, you are obligated to a set monthly payment
  • Seek out professionals who can help.  Search realtor websites and find out how much house you may be able to afford.  A banker can also help you discover some spending limits on a house payment also and can pre-approve you for a loan if decide home ownership is for you.

Below are some links for further information to help with the decision making process.

Tax Information for First-Time Homeowners:
http://www.irs.gov/publications/p530/index.html
What You Can and Cannot Deduct:
http://www.irs.gov/publications/p530/ar02.html

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