There are several things to consider when deciding whether to purchase a home or to rent a property. Purchasing a home is usually one of the largest financial decisions you will ever make; however, there are several benefits to taking this approach that include the following:
Home ownership will generally build wealth over time; however, this is true only of the purchaser can actually afford it. When you purchase a home that is well within your budget, the chances of seeing your individual wealth increasing are significant.
The equity that you have in your home is the amount of money you can sell the home for – minus what you still owe. Each month when you make a mortgage payment, the amount that you owe is reduced and your equity is increased. And thanks to the new Qualified Mortgage Rules that have eliminated risky interest-only loans, the chances of your equity growing as the months go by are even better.
Tax Deductions on Mortgages:
Mortgage deductions allow homeowners to subtract their mortgage interest they have paid over the year, which is generally a large deduction as interest payments can be the largest part of your mortgage payment during the early years of home ownership.
All of the real estate property taxes on your primary residence as well as a vacation home are deductible as they relate to income taxes.
A Home Mortgage is Like a Savings Plan:
Having the responsibility for making payments on your mortgage is similar to setting up a forced savings plan for you and your family, which is a move in a positive direction.
When you rent a property, the money that you spend is gone forever and you won’t have anything to show for it. If it’s within your budget to do so, purchasing a home makes much more financial sense than renting.
Long Term Investing:
If you look at the advantages of purchasing a home versus renting over the course of time, you will discover that it pays to purchase. You will also find that as long as you have to pay in order to maintain a stable over roof your head, you might as well make payments on something that you own and call your own – opposed to paying off your landlord’s property.