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Is now the time for you to buy a home, or should you rent? The idea of owning your own home can be thrilling but also frightening. So is it for everyone? How should you decide? These are things you need to know before making the right decision for you and your family.
Pros for owning a home
Equity, equity and equityA major pro for buying is equity. When you pay your monthly mortgage payments you increase your ownership of your home every month. When mortgage rates drop, you can refinance your home to get lower interest rates. Then you can always borrow against your equity of your home if you need to borrow, say for a big purchase like your children's college tuition or a second home. And of course the biggest reason is that one day you will not have a mortgage payment and be sole owners of your home. This is looked at better than paying rent, where your monthly payment disappears, landing in your landlord's bank account.
Uncle Sam is nice to homeowners
Tax breaks are your friend. You can deduct property tax and mortgage interest on your taxes. Another bonus is if you decide to sell your home the IRS won’t apply “capital gains” tax on profits you make off your home if you qualify.
You are in charge
When you own your home, you make the decisions. If you have an urge to paint your living room red, then do it! You can decide if you want a different sink, new tile or hammer whatever pictures you want up on the wall. You don’t have to ask a landlord; you can simply do it. Just remember it comes straight from your pocket though.
Pros for renting
It is better for the short stayers If you will be in your home less than six years, then it would actually be smarter to rent in most cases. By the time you pay yearly costs to own a home such as mortgage payment, community living fees, renovation cost, maintenance, property tax and homeowners insurance it can add up. Not to mention, purchasing costs like the down payment and realty fees. Then selling costs when you decide to move. Renting is the smarter way to go if you know you won't be staying in the area long, or your job security is low. Rent and renters insurance are the only fees to be concerned about.
Maintenance guy is a pro
Leaky sink? Oven not working? All you have to do is call your maintenance buddy. You don’t have to come up with any extra money to pay for the problem. The landlord should take care of it all. If you aren't handy, then this is something you may want to consider.
Flexibility
It is more flexible to rent than to own. Even if you are not moving far, you may not like the area and want to live on the other side of town. Renting allows you to have the freedom to do that. Many like the feeling that they can pick up and go without waiting to see if their home sells or not.
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.
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