Is now the right time for you to buy a home? You have many options to consider and choices to make. Buying a home is a big responsibility, financially and emotionally, but, most people want to own a home. Homeownership often is referred to as “the family dream.” Why is it so special? Among the reasons: Real estate often is an excellent investment, perhaps the number one source of wealth-building for families.
Owning a home has many benefits. When you make a mortgage payment, you are building equity – and that’s an investment. being given the freedom, stability, and security of owning your own home, they are definitely worth it! Owning your own home also can be a great source of pride and stability.
But homeownership may not be for everyone. It’s a big financial commitment – starting with the initial shock of your purchase (including a “down payment” and fees paid to a real estate agent, the lender and others) followed by years of monthly mortgage payments, property insurance and maintenance costs. When you decide to purchase a home, you accept responsibility for paying for these expenses. They are additional costs to your monthly mortgage payment and should be included in your budget estimates: Property Insurance, Utilities, Maintenance fees, Home Owner Association (HOA) Fee if applicable.
One of the advantages of renting is being generally free of most maintenance responsibilities and the flexibility of moving almost as soon as you decide. But by renting, you lose the chance to build equity, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for your housing needs. There are many considerations in choosing between renting and buying:
- Do you want to spend several years in a house and in a neighborhood?
- Do you enjoy lawn and garden work?
- Might you need to move suddenly to care for family?
- Do you want to keep your assets accessible in the bank, or do you want to invest long-term in a home?
Buy vs. Rent: Pros and Cons
|Buy||Property builds equity||Responsible for maintenance|
|Sense of community, stability, and security||Possibility of foreclosure and loss of equity|
|Free to change decor and landscaping||Less mobility then renting|
|Not dependent on landlord to maintain property|
|Rent||Little or no responsibility for maintenance||No equity is built up|
|Easier to move||No control over rent increases|
|Possibility of eviction|