When faced with the decision of either buying or renting a home, it’s important to look at the pros and cons of each side. While renting may seem like a good idea for the cheaper up-front costs and low commitment, those looking to establish roots, grow a family, make an investment, or have creative freedoms over their living space may need to consider buying over renting. There are so many incredible advantages to owning a home that make being a homeowner very rewarding. If you’re on the fence about purchasing your next home, here are 7 benefits of homeownership.
CREATIVE FREEDOM
When buying a home, you can truly make it your own by making any renovations and changes you desire. Want a more open concept layout? Tear down a wall or rearrange your kitchen as you see fit. Hoping to spend more time outside in the nice weather? Build a cozy, covered deck that will be perfect for entertaining guests. Even small changes such as changing the home’s hardware and paint can make a huge difference in how you enjoy your space, but when you rent, these updates can be denied by landlords.
ESTABLISH ROOTS
Moving from rental house to rental house each year can get exhausting and can make a house feel less inviting. If you rent out a place for long time, there’s always the chance of your landlord deciding to sell the house once your current lease is up. When you buy a home, it will be a place you can always rely on, since it will always be yours.
Being secure in the home you reside in can make all the difference when raising a family or being a solid member of the community. It’s always a great idea to find a home situated in a neighborhood surrounded with your favorite shops, restaurants, schools, and community resources. You’ll feel a sense of homeliness both inside your house and out!
TAX ADVANTAGES
Homeowners get the added benefit of deducting mortgage interest when filing their tax returns each year. Since interest payments can be the largest part of a mortgage payment in the first few years of home owning, this tax deduction can be incredibly helpful and something to look forward to. Other deductible payments include property taxes, home equity loans, and some closing fees. Tax laws are regularly changing, so be sure to check what benefits you may receive when purchasing a house.
BUILDING EQUITY
Home equity is one of the most valuable benefits of homeownership. Equity is the difference between the value of your house subtracted by what you owe on any mortgages. Your equity will continuously grow as you pay down your mortgage. As you regularly make mortgage payments, more of your payments are going to go towards paying off the actual loan rather than the interest, which will increase your home’s equity. You can also build equity when your home gains value due to renovations or changes in the real estate market.
APPRECIATION
In many cases, the value of your home will increase over time. Real estate appreciation occurs because of factors such as economic trends, consumer confidence, and household finances – all of which are major catalysts in the appraisal for the property value. And even if the house’s value depreciates, the property’s land could end up becoming more valuable.
Research from the Federal Reserve Bank of St. Louis revealed that the average price of homes sold in the United States increased from $224,300 in 2010 to $346,800 in 2020. That’s a 54.6% increase in only ten years!
STABLE PAYMENTS
When leasing a home or apartment, renters have to release their space typically on an annual basis. Each year as they get a lease renewal, there’s the chance that the price of rent will increase. When you own a home, the monthly payments won’t get more expensive as each year goes on, since you can get a fixed-rate mortgage. You can also make bigger payments as you increase your finances and pay it off even faster, if that’s what you desire. Then, once the house is fully paid off, all you have to worry about is HOA fees or property taxes, if applicable. No rent is the best kind of rent.
INCREASED CREDIT SCORE
Owning a house can actually regularly raise your credit score. Granted you make all of your payments on time, your credit score is going to gradually increase. Please note that at the start of the home buying process, your credit score will drop. But after a few months of on-time payments, your score will be back to normal and then will likely exceed what it was before. In addition to this, paying your mortgage on time can eventually lower the overall total of your loan!
