The decision to purchase a home is one of the biggest financial decisions most people make. There are both pros and cons to buying a house. Here are some of the facts you need to consider.
Advantages of Buying a Home
A Good Investment
In most cases, a home is a very good investment. It is rare for a home to lose value, but if it does, it usually gains the value back if you wait for the market to improve. You need to live somewhere anyway, so you may as well be paying towards an investment that you own.
Low Interest Rates
The interest rates on a home loan are very low right now. This means that the monthly payments will be much less than they would be with a higher interest rate. The interest rates for MaxLend loans depend on your credit score, but if you have good credit, your mortgage interest rate should be fairly low.
Tax Benefits
Mortgage interest is deductible on your federal taxes. If you itemize your taxes, you will be able to claim these deductions. It will not help you if you choose to take the standard deduction instead.
Building Equity
When you sell your home and pay off the loan, the amount that is left is your equity. That is the portion of your home’s value that is yours. Your equity in the home grows as you pay down your mortgage. Your equity in the home also grows if the home appreciates in value. If you are renting, you will not be building equity. Therefore, renters should be saving and investing money so that they will be building their net worth.
Disadvantages of Buying a Home
Lack of Mobility
As a homeowner, you don’t have the mobility that a renter does. If you want to move for a job or any other reason, you will need to sell your home. If you have only owned the home a few years, paying a realtor could eat up any equity that you have built up.
High Initial Costs
There are some high costs when you first purchase a home. Closing costs and fees can add up to a large sum of money. You will also have inspection fees, title search costs, taxes and more. On the other hand, if you decide to rent, you will only need to pay a small security deposit and you are set.
Home Maintenance
When you are renting, the landlord will pay for any maintenance costs that arise. As a homeowner, you will have to pay for all home maintenance yourself. Some of these costs will be very high, such as when you need to replace your roof, furnace or air conditioning unit. Even the smaller costs can add up. You will also need money to pay a landscaper or do the work yourself.
Purchasing a home is a big decision. It will change your life and impact your finances in a big way. Make sure you go into it with open eyes and weigh the pros and cons before you decide.