Homeownership is a great investment because it allows you to build equity over time
When you purchase a home, you also pay off your mortgage faster, saving thousands of dollars. This means that you’ll be able to spend less each month on rent, which is good because renters often have trouble saving for emergencies or unexpected expenses.
When you purchase a home, you get to enjoy many benefits over those who rent. There are several good arguments for buying a house instead of renting one.
- You don’t have to worry about paying rent
With a rental agreement, you pay a set amount each month regardless of what happens to the value of the property. If the value goes down, then you’re stuck making higher payments. If the value increases, then you still owe money. When you buy a home, however, you only need to make monthly mortgage payments based on how much equity you’ve built up in the house. There’s no cap on how high the value can go.
- You’ll own something
You won’t feel any sense of guilt if you decide to sell your condo or apartment. In fact, you might even make a profit! Buying a home gives you ownership rights, which means that you can do whatever you want with it. Renting doesn’t give you these rights, and landlords often try to restrict them.
- You’ll save money
Buying a home could potentially cost less than renting. While buying a home isn’t always cheaper than renting, it does depend on where you live. You should consider both the upfront costs (such as closing fees) and ongoing expenses (like maintenance).
- Your credit score will improve
If you have bad credit, you may not qualify for a loan, especially if you’re looking at expensive homes. However, once you earn good credit, lenders will approve you for larger loans and lower interest rates. Lenders will look favorably upon people who have paid off their mortgages early and have steady jobs. A positive track record can help prevent future issues like defaulting and bankruptcy.
If you lease, you take on significant risks
What if your landlord stops paying his/her share? Or what if he/she decides to raise the rent? These things happen, and they hurt your financial situation. Homeownership minimizes the chances of these problems occurring. When you buy a home you own it outright.
In addition, when you purchase a home you receive all kinds of tax deductions, including depreciation, mortgage interest deduction, and property taxes. These are not available when you rent. Avoid any misunderstanding about the financial benefits of homeownership and contact an expert. Nancy Henderson from High Ridge Realty in Denver can help you decide the best course of action for this type of financial decision.