June is National Homeownership Month!
A home may be the single largest investment you make in your lifetime. We all know that stress can play a big role when making a significant purchase. There are many reasons you shouldn’t feel buyer’s remorse when purchasing your first home, though.
Here are a few pros of taking the leap from renting to owning:
- Your payments will build your equity. In the beginning, your payments cover more interest, but over time more applies to the principal. Even better, paying extra on the principal each month will make you recognize the equity faster, saving interest expense.
- Parts of your mortgage payments could be tax deductible, including taxes and insurance.
- Forced savings. Like it or not, you have to make that monthly payment because you risk foreclosure on your home if you do not. Unlike a 401K, or a savings account, this purchase is an investment you must put money into every month!
- In addition to helping with your credit score (assuming you pay in a timely fashion), building equity in your home improves your overall financial position and provides an opportunity for further lending down the line.
Sure, you say, but there are many headaches involved in home repairs and maintenance. While you do have more responsibility for maintenance when you own your home, you will also not have the negative issues that come with renting a residence, such as:
- Rental Increases. You are pretty much at your landlord’s mercy regarding rent increases, which can come as frequently as every year.
- No wealth creation. If you rent, you give 100% of your money to someone else. It is that simple.
- No tax benefits. Renting comes with no options for tax deductions, typically.
- Less stability. You are not building equity for yourself and are at the mercy of your landlord, who may decide not to renew your lease, sell the residence and other factors.
- Rules, rules, rules. You can’t hang this. You can’t park here. You have 24 hours to collect your package. There are a million “musts” when renting. When you own your own home, you may have to comply with HOA standards in certain areas, but the freedom is far greater in terms of personalizing your living space.
Buying a home comes with being in charge of anything and everything. You can make your own rules, remodel any of your own spaces, stay in that home forever or even rent out your space. Owning a home could be very profitable for many by helping build your wealth without having to do much. Also, buying a home could be cheaper than renting in the long run. Why pay rent when you can make a mortgage payment, buying your home over time?
The choice of renting or buying is individually situational, and you may hesitate over what’s right for you. A little research can go a long way and help you make the right decision.
Current homeowners can celebrate National Homeownership Month, as well! We would like to remind all homeowners about the importance of protecting their most valuable asset – their home. Home insurance provides financial protection in case of unforeseen events such as natural disasters, fires, and theft. Investing in a comprehensive home insurance policy gives you peace of mind knowing that your home and family are protected.
Celebrate National Homeownership Month by taking the necessary steps to protect our homes and loved ones. To purchase a homeowners insurance policy or review your current coverage, contact TrustPoint Insurance and Real Estate today – at 620.364.5665 or email@example.com.