Why buying beats renting: 5 benefits only homeowners can enjoy
When it comes to buying a home versus renting, there’s really no comparison. While renting might be the right choice in certain circumstances, over the long-term, homeownership offers unique financial and personal benefits that renters just can’t access. If you’re pondering the question of renting vs. buying, consider these unique advantages that only homeowners can enjoy.
1. Never throwing away money on rent
Unlike your monthly rent, the payments homeowners make on their mortgage actually help strengthen your financial future. As homeowners steadily pay down their mortgage, they also build up home equity. And once you reach 20% equity in your home, you can tap into it through a home equity loan or opt to refinance your mortgage to potentially secure a lower interest rate or shorter term.
2. Enjoying fixed housing expenses
If you opt for a fixed-rate mortgage, you can rest easy knowing that your mortgage costs will remain the same over the term of the loan. Your mortgage payments will always stay the same for the, say, 15-year or 30-year term of the mortgage. Compare this with renting, where landlords can opt to increase renting costs every year, sometimes by large and unexpected amounts.
3. Doing anything you want with the property
When you’re a homeowner, your property becomes a blank slate. You no longer have to hold back your creative instincts, and are free to paint rooms, alter landscaping and even renovate interiors as much as you like. Being a homeowner means you have the freedom to create a home that reflects your unique taste and preferences (as opposed to your landlord’s).
4. Potential tax benefits
Homeownership is one of the most important components of the economy, and federal and state laws exist to offer unique benefits to homeowners. While eligibility for tax benefits vary, homeowners can often deduct the interest they pay on their mortgages. There can also be the option to deduct property taxes up to a certain amount. For more specific information about potential tax benefits of homeownership, contact a real estate agent or accountant in your area.
5. Putting down roots in a community
Buying a home helps connect you to a specific neighborhood and community. Unlike renters, who may only live in a specific residence for one or two years, homeowners tend to put down roots in their surrounding areas. They often volunteer in local community organizations, sponsor block parties or become involved in a local school, all of which can help create richer, fuller relationships with their community and a stronger sense of home.
While homeownership offers unique long-term advantages over renting, it’s always important to consider the factors unique to you and your needs. But if you feel like you’re ready to make the jump to owning, we’re here to help make sense of the financing process.
Savings, if any, vary based on consumer credit profile, interest rate availability, and other factors. Applicant subject to credit and underwriting approval. Restrictions apply.
Guaranteed Rate, Inc. does not provide tax advice. Contact your tax adviser with any tax related questions.