A lot of factors impact whether buying a home is right for you – from your interest in home improvement and maintenance to your credit rating and ability to undertake the ongoing costs of home ownership. Even your age can impact whether or not it’s a good time to buy a home. It’s one of the most important decisions most of us will ever make.
There are pros and cons to both renting and buying to consider in order to decide which is best for your circumstances, lifestyle and finances. Renting may offer greater personal and financial flexibility. But home buying can allow you to start building equity on your investment.
Take a look at this list of pros and cons before you make a final decision. If buying a home looks like it’s right for you, we’ll be glad to sit down with you to answer any questions, help assess your lifestyle and housing goals and get your home search started!
Advantages of renting
No maintenance costs. If you have a leak or an appliance fails, you call the owner or manager.
Flexibility. If you frequently change or relocate because of your job, it’s faster and easier to move out of a rental.
Repairing credit. If you need to improve your credit before applying for a mortgage, making rent payments on time helps.
Less expensive. Property taxes and maintenance costs are built into your monthly rent.
Location. Renting lets you see if you like a neighborhood before buying
Advantages of home buying
Greater privacy. You’ll have more in your own home than in an apartment.
Decorating. From painting to remodeling and landscaping, you can do whatever you wish.
Fixed monthly payments. Insurance and property taxes may rise, but principal and interest payments are constant if you have a fixed-rate mortgage.
Tax deductions. Ownership costs can be offset by deducting interest and property taxes.
Build equity. Historically homes rise in value. But even if yours doesn’t, equity and ownership percentage increase with every payment.
Gain a new community. Build life-long friendship
Disadvantages of renting
Rent increases. Rents often go up with each new leasing period.
Decorating. You may not be allowed to even change the paint color.
Security deposit. Yyou get your deposit back only if you’ve maintained your unit.
No equity. You don’t own this apartment so only the landlord is getting the value of a property appreciating over time.
No tax benefits. Only a landlord can reduce the cost of ownership by deducting interest and property taxes
Disadvantages of home buying
Cash down payment. You may have to tap savings for a down payment and closing costs.
Insurance. Most lenders require you buy home insurance and also mortgage insurance if you put less than 20% down.
Maintenance costs. When something breaks, you pay to fix it.
No fast moves. If you change jobs or relocate you may not be able to sell quickly or get as high a price as you’d hoped.
Taxes. Property taxes tend to increase every year.