One of the most significant decisions that anyone can make in their life is buying a home. Renters often wonder, “what are the benefits of owning a home vs. renting?” Especially in today’s climate, many benefits range from offering good long-term value and providing more financial stability. If you plan to live in the same property for a few years or more, you may want to consider the following benefits of owning a home, which you may not benefit from if you rented.
Good Long-Term Investment as Home Values Rise
A home is often considered one of the most significant and stable assets. With rising home values and increased homebuyer demand, you may be able to sell your home in the future for a profit. As people are looking for extra space for a home office or backyard, demand for homes in the suburban Tri-state area has surged. In turn, property values in those areas have continued to rise.
Build Equity in your Home
Paying your monthly mortgage payment means that a little bit more of the house belongs to you each month, and a little less belongs to the bank. Once you pay off the mortgage at the end of the term, you will own your home free and clear. If you are renting, you have no vested interest in the house and are not building equity as your monthly rent payments go directly to your landlord.
Interest Rates Remain at Historic Lows
Mortgage rates have remained at historic lows for about two years now. Many renters are taking advantage of these low rates and using them as an opportunity to enter the purchase market. Plus, as rates remain low, your monthly mortgage payment may save you hundreds of dollars compared to your monthly rent payments.
Low Down Payment Options
Some people may wonder if they even have enough money to buy a house. A down payment is one of the largest upfront costs associated with purchasing a home. However, GuardHill offers many programs with low down payment requirements. Additionally, if a friend or family member is willing to help you with a down payment, you may benefit from a down payment gift. These options may allow you to enter the housing market sooner than you thought!
Stable Monthly Payments
If you choose a fixed-rate mortgage, the monthly payments are locked in and stable for the loan’s entire life. Knowing that your monthly payments will remain fixed for a certain number of years will allow you to better budget and plan for your financial future. Plus, tenants are at the mercy of their landlords; Rents may fluctuate each year, forcing you to relocate and find a new home that fits within your budget.
Another attractive benefit of owning a home is the tax deductions. When you own a home, you can deduct the interest on up to $750,000 of debt used to acquire or improve your home.
Build your Credit
Owning a home and making consistent monthly payments may help you build up your credit score, which is excellent for those who are looking for a little extra boost. Just remember, it is imperative to pay your mortgage in-full and on-time each month.
Have the Freedom to Make the Home Yours
When you own a home, you have the freedom to make improvements or alterations to your property as you please. Your home will truly feel like home, as you can put your personal design touches on each room. If you’re thinking about renovating or updating a home, click here to read about which home improvements add the most value.
Surge in new construction
In the last year or two, demand for for-sale homes skyrocketed. As there has become less inventory of homes on the market, there has been a surge in demand for new construction homes. Owning a new construction home may allow you to pick out the finishing touches and move into a home with brand new appliances and technology.
If you are thinking about buying a home and would like to discuss the benefits of owning a home more in-depth, feel free to contact one of our mortgage specialists!