Renters

Renting vs. Owning

 

We all know that buying a home is a huge part of the American Dream. Although times have been tough in recent years, most of us still believe in that dream, and want the security, comfort, and pride that homeownership can bring. If you’re currently renting, you may be asking yourself whether or not this is a good time for you to consider buying a home of your own. I think the answer to that question is always a resounding “Yes!”.

Let’s take a moment to look at the benefits of home-ownership, as opposed to renting:

Pride of ownership. If you’ve been thinking about buying a house for a while, you’ve also probably envisioned the feeling you’ll have when you first turn the keys in the door, and walk into a home that is truly yours. That feeling you envision is the pride of ownership, and the truth is that it never really goes away. Every time you pull into your garage, or walk up to your front door, you’ll enjoy the priceless thrill of knowing that you aren’t just living in a house, you’re living in your home.

Stability. With homeownership, there’s no worrying about having a landlord raise your rent, or asking you to move. If you obtain a fixed-rate mortgage, the payment you make in the last month of your mortgage will be the same as (or less than!) the one you made in the first month; there are no jumps in the cost of being in your home to take you by surprise.

Build equity. When you pay rent, you’re essentially paying someone else’s mortgage, and helping them to enjoy the benefits of ownership. Why throw your money away on someone else’s dream when you could be building equity in your own home? Despite recent waves in the real estate market, the average annual appreciation rate for homes was still 5.4% through 2009, according to the National Association of Realtors. Add to that the tax benefits of being able to deduct your mortgage interest from your federal taxes, and the wealth-building potential of homeownership becomes very apparent, indeed.

Total control. Owning your home means that it can truly become yours. Paint colors, lighting fixtures, and other decorative touches can now reflect the personality of your household, and not the tastes of someone else. Having control also allows you to reap the benefits of changes and improvements you make to your house. Improvements you make in a rental property end up benefiting one person: the landlord. Some landlords may even charge you for the costs of reversing any improvements you may have made! Having complete control over your home means that improvements you make will add to the value of your home, and ultimately increase the value of your investment.

One of the first, and most important, steps of buying a home involves familiarizing yourself with your credit report and your FICO® score. By making sure that you complete this step as soon as you embark on the journey from homebuyer to homeowner, you’ll make the entire process easier—and maybe even a little more affordable.