5 Reasons You Should Buy vs Rent Your Home
January 4th, 2018
January 4th, 2018
Are you currently renting an apartment or home? Have you thought about buying your own home? Many people may find that owning a home just makes more sense financially based on their lifestyle and pocketbook. If you’re trying to decide whether you should buy vs rent, consider these 5 reasons why buying a home may be the right way to go.
Owning your home means you can do whatever you want to your property. If you want to knock down walls to make your house feel more open, you can. You also can change out the carpets for hardwood floors. Or, you can paint your bedroom walls purple. Have you always wanted a swimming pool? You can add one in the backyard. Whatever home improvements you want to make, you can do them without asking a landlord for permission. Plus, you don't have to worry about losing your security deposit. Better yet, sometimes, these home improvements may increase the value of your property, too.
While a home is large purchase, generally, it provides you with a better return on investment compared to other large purchases like a car. Depending on the local market condition, your home should go up in value over time. An experienced real estate agent can’t predict exactly what’s going to happen to a property’s value. But, they can give you an idea of what to expect in the future, based on what’s happened to the property over the previous years.
When renting, your landlord may raise your monthly rent annually – costing you more money. However, when you buy a home, you’ll likely need to get a mortgage. A fixed rate mortgage is one of the most popular types of home loans. An advantage of a fixed rate mortgage is you’ll have stable monthly payments. So, you'll have greater peace of mind.
Note: Other home ownership payments, like property taxes or homeowners’ insurance may go up annually. Typically, these increases are minimal.
One of the benefits of home ownership is you can build equity. When you make your monthly mortgage payment, a portion of that payment goes to pay down the loan each month, giving you equity in your home. Equity is the probable market value of your home minus any liens against the property. Over time, the more you pay on your home, the more equity you have invested. Basically, this investment is like a forced savings. Eventually, when you sell your home after the mortgage is paid off and minus other closing-related expenses, you may walk away with a huge chunk of cash.
Homeowners can deduct mortgage interest and property taxes when they file their tax returns each year.
For mortgage interest deductions, with the tax law through 2017, you can deduct the interest you pay on mortgage debt up to $1 million ($500,000, if married filing separately) on your primary or secondary home. Beginning in 2018, the tax law states that for homes bought before December 15, 2017, there is no change to law. But for homes bought December 15, 2017, or later, you can deduct the interest you paid on your mortgage debt for up to $750,000 ($375,000, if married filing separately.)
For property tax deductions, through 2017, the tax law states you can deduct the property taxes you pay on any real estate you own. Beginning in 2018, you can only deduct up to $10,000 ($5,000, if married filing separately) for a combination of property taxes and either state and local income taxes or sales taxes.
Two of the biggest advantages to owning your own home is you don’t have to worry about your landlord ever kicking you out of your rental property. Plus, you'll never have to talk to a landlord again. However, that also means you’re responsible for all the upkeep of your property.
Still trying to decide whether to buy vs rent? Currently, interest rates remain at historical lows. Now is a great time to take advantage of purchasing a new home. If you’re ready to pursue home ownership and will need a mortgage to purchase your home, the mortgage experts at Grandview Lending in Indianapolis can help you find the right home loan to fit your needs. We offer a variety of home loan options, like conventional, FHA, VA, and USDA loans, to name a few. Contact us at 317-255-0062 to learn more. We’ll help you make the best possible decision for you and your family.
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