Owning a home continues to be a critical aspect of the American dream for many, but others view it as one of the largest financial pits in existence. Purchasing a house is a big decision, making it crucial to weigh the pros and cons beforehand.
If you’re considering buying your first home, then you might have a lot of questions like whether you are ready for the responsibility or if this is the best financial decision to make right now. To help you decide, here is a list of the ups and downs associated with homeownership.
Owning your own home comes with an increased level of privacy when compared to townhouses or apartments. You have space in-between you and your neighbors, allowing you to crank up the TV or relax on the back porch instead of a balcony.
The costs to own a home are far more predictable than renting, since they are based around utilities and a fixed-rate mortgage loan. You will also be able to deduct the interest and property tax from your federal taxes in April.
While purchasing a home is a major investment, your house is likely to increase in value over time. This can help you build equity, creating a nice nest egg for the future. You also have the benefit of making any renovations you choose, personalizing each space, and the benefit of a yard.
The final pro to owning a home is the pride that comes with it. This can come in the form of simply being satisfied that the house is 100% yours, or you could be proud to live in a nice community. However, apartments can have excellent communities as well, like the one listed here.
On the downside, mortgages usually last around 30 years. That’s a long-term financial commitment, tying you down to one place for quite some time. You are also responsible for every bit of maintenance on your home from broken toilets to replacing the siding.
While your mortgage payment may be fixed, the monthly payment could be higher than rent depending on your location. Buying a home also requires a hefty down payment, closing costs, and moving expenses.
There is always the chance that your home will decrease in value, leaving you on the negative end of your investment. While this might not be an issue if you decide to stay there permanently, it can cause complications if you decide to move later on.
Spring cleaning earns a new definition of home ownership. You are responsible for cleaning the gutters, maintaining the yard, and ensuring that major appliances like the furnace are in working order. That includes changing filters or replacing parts.
How to Decide
Homeownership is not for everyone. Carefully consider the pros and cons of both, as well as your financial situation, before deciding. If you can afford to pay a mortgage and maintain a property, then you’re ready to buy a house.
You might decide that renting makes more sense given your current situation, too. Maybe you’re finishing school or looking forward to a promotion that would require you to relocate. In which case, you might want to look for an apartment like the Renoir House.
Making the final decision is tough. However, knowing all of the facts beforehand will help you to make the right choice.