With rental properties getting scarcer and scarcer, you might be considering taking the plunge and purchasing a home. There are a number of good reasons to opt for home ownership, not the least of which is you don’t have to get permission to do things like painting a wall or planting a garden. However, there are a few downsides to home ownership. It’s important to weigh the pros and cons of both renting and owning before you sign any papers.
Pros and cons of renting
The two big advantages of renting are the flexibility renting offers and that it generally takes much less money upfront to rent a home than it does to purchase a comparable home. In addition, when you rent, your landlord is responsible for maintenance. You probably won’t have to mow the grass, and you won’t have to worry about being able to afford a new furnace if the existing one breaks down.
As we mentioned earlier, you also don’t have to ask permission to do most remodeling. In some cases if you own a home, an historic board or homeowner’s association may have rules you need to follow about the exterior of your home, but you’ll know those upfront. For most changes, you can follow your heart and your own design taste.
However, there are a few downsides to renting. First and foremost, you don’t own the property, so your landlord can decide to sell the house, let her daughter move in instead of you, or even occupy it herself. You have little recourse and often only have 30 days to find another place to live and move your belongings.
When you rent, your monthly rental payment goes to your landlord, so she can pay her mortgage and build equity in the property. After five or 10 or 30 years, you won’t have anything to show for all of your rental payments.
Pros and Cons of purchasing a home
The prime advantage of owning a home is the permanence. As long as you continue to make your mortgage payment each month and pay your taxes, you’ll always be able to live there.
Another key advantage of owning a home is that you’ll be building equity. That means a portion of every monthly payment goes towards eventually paying off your home loan and not having a house payment anymore. As your home increases in value, so does your equity. Imagine retiring in 30 or 20 or 10 years with your home completely paid off, where you only have to pay your taxes and insurance.
Mortgage rates continue to be low, much lower than the current rate of inflation. That means that your home will likely increase in value at a fast pace, while your fixed rate mortgage remains at the current low rate.
Of course, owning a home has a few downsides. You’ll be responsible for all of the maintenance and repairs on your home. You also can’t just pick up and move on a whim, since you’ll have to sell your home before you can move. (However, in today’s competitive real estate market, you’re likely to sell your home quickly.)
To learn more how owning a home can give you and your family the security you deserve, contact The Potempa Team at Fairway Independent Mortgage Corporation. Our team can help you find the mortgage that will work best for your family’s unique situation and help you get into a home without delay.