By July 5, 2013 Read More →

Should I Buy or Rent a Home?

The decision to buy a home is one of the most emotional and largest financial decisions you may make. Before buying a home, it’s important to consider how such a purchase will affect your finances and your lifestyle. It makes sense to review all pros and cons of becoming a homeowner before making this big commitment.

See Also: Buy or Rent Calculator

Pros of Owning a Home

  • Homes typically increase in value allowing you to build up equity.
  • Costs are more stable than renting if you have a fixed-rate mortgage.
  • Mortgage interest and property taxes are tax deductible.
  • Pride of ownership and improving your home the way you like it.

Cons of Owning a Home

  • A long-term financial commitment, typically 20 to 30 years.
  • You pay for all minor (leaky faucet) and major repairs (new roof).
  • More difficult to get up and move if your job requires that.
  • Mortgage payments are generally higher than rent payments.
  • Requires up front money such as a down payment & closing costs.
  • Your home value may not increase, depending on the housing market.

Pros of Renting a Home

  • Rent payments tend to be lower than a comparable house payment.
  • Your rent payment may cover utility costs.
  • More flexibility to get up and move since most leases are for 12 months.
  • Landlord pays for all maintenance and repairs, not you.

Cons of Renting a Home

  • No tax deductions for mortgage interest and property taxes.
  • Your rent payments will likely increase each year.
  • You don’t have the freedom/flexibility to make the home “your own.”
  • Dealing with a difficult or unresponsive landlord.

Try the Buy or Rent Calculator
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