Owning a home is a dream come true for most people. To them, it is living the ideal life, for others, it is the worst decision they will ever make as far as their finances are concerned. The reason for this is that there was no proper in-depth analysis before they made the purchase. Many questions come to mind when it comes to owning a home, questions like, do I really need a home? Will I stay in this home long enough to reap the benefits of owning it? Am I ready for the financial responsibilities associated with owning this home? Owning a home is a major financial investment and should not be done without a proper understanding of all aspects of ownership. Below is a look at the pros and cons of owning a home, this should help prospective home owners determine if owning a home is in their favor.
Pros and Cons of Owning a Home
There is the need to consider the financial impact owning a home will have on you. Would being a home owner have a positive effect on your financial position? Let us look at the advantages and disadvantages from a balanced point of view before arriving at a conclusion.
- As a home owner, you have greater privacy.
- There is a great possibility that your home will increase in value.
- You tend to have a stable cost as compared to renting because most mortgage rates are fixed.
- Interest and property tax portion of your mortgage is tax deductible.
- There is pride and a healthy self-esteem associated with owning a home.
- The financial commitment associated with owning a home is long term.
- All maintenance related expenses associated with your home is your responsibility.
- When you own a home, you are more likely tied to your community making it more difficult to suddenly relocate.
- When buying a home, there is a down payment, mortgage payment and closing cost.
- If you do not make the mortgage payment, your home can be taken by the bank.
- There is no guarantee that the value of your home will increase.
Pros and Cons of Renting a Home
Depending on your financial standing, renting a home might be a preferred option. Here are a few pros and cons associated with the renting.
- It may be a cheaper option than buying a home with comparable size. Your rent might also cover the monthly utilities.
- It affords more flexibility especially when you have a job that requires you to move from place to place.
- Maintenance expenses are not on you. The landlord is responsible for all maintenance from plumbing to electricity as well as other expenses associated with household repairs.
- You are not entitled to a tax break. When you file for a tax return, you cannot claim deduction for property tax and mortgage.
- Your rent is not fixed and there is the possibility that it would increase from year to year.
In summary, there are several factors to consider when deciding whether or not to buy a home as ownership is not for everyone. This important decision should be based on your present financial status, the nature of your job and what plans you have for the future.
Needham MA Real Estate
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