Everyday scores of people wrestle with the pros and cons of buying a home or renting. If you’re losing sleep at night over this big decision and unsure if the homeownership plunge is best for you, consider the following financial advantages to owning a Gemcraft home:
Building Equity – A Forced Saving Plan
Writing a rent check each month accomplishes two things – it pays for a temporary roof over your head and contributes to your landlord’s home equity and wealth.
If you like your landlord you may be okay with this arrangement, but most people want their hard earned dollars working for them and not lining someone else’s pockets. So remember, once your rent check is cashed, that money is gone for good.
On the other hand when you buy a home, each mortgage payment increases your home equity – and personal wealth. In time, these mortgage payments not only buy you a piece of the American Dream but also serve as a retirement nest egg and financial safety net that can help you secure line of credit at reasonable terms.
Homebuyers Usually Pay Less that Renters
It’s a common assumption that renting is cheaper than buying a home, but that thinking may be incorrect. In many cases people rent if they don’t have an adequate down payment, have poor credit or excessive debt. While these factors won’t necessarily prevent homeownership, they will influence the loan terms resulting in a higher mortgage payment.
However those with good credit history and the means to absorb upfront homebuyer costs will find they are rewarded with a low interest fixed mortgage payment less than what they would pay in rent. Also a fixed rate mortgage locks you into a consistent monthly payment that won’t fluctuate in years to come as rental costs climb.
If you’re curious how much your monthly house payment might be, check out Gemcraft’s home financing calculator here.
Big Tax Advantages
As we mentioned earlier, once you pay the landlord the money is gone for good. However, as a homeowner you can make mortgage payments work for you at tax time by deducting interest, property taxes and leveraging energy efficient credits.
So in addition to building home equity, when you own a home these valuable tax perks may result in significant savings and score you a nice government refund.
No Unexpected Rent Increases or Moving Costs
Buying a home is a long term commitment that offers a sense of security and peace of mind. Whereas renters often find themselves at the mercy of a landlord who holds the power to increase the rent or not renew the lease.
As a homeowner, you are in full control. You can rest easy knowing your mortgage payment won’t unexpectedly change. Also, your next move – should you decide to sell or rent your home – will be on your terms and your timetable.
Buying a home is a big commitment but it doesn’t necessarily mean it has to be your forever residence. Many people put down roots in their home for good but for others there comes a time when they’re ready to downsize or looking for a new home that suits their changing lifestyle.
It happens often and many homeowners decide not to sell and lease their home to a long-term tenant or short-term renters through popular platforms like Airbnb or VRBO. This generates a stream of income that helps pay off the mortgage and continue building equity until the homeowner decides to sell or move back.
If you’re considering taking the plunge into homeownership contact us today. Even if you’ve had credit challenges in the past, we’ve worked with thousands of new homeowners to help get them into the home of their dreams. We’ll help you find the perfect home AND financing plan to suit your needs because we believe that everyone deserves the happiness that comes along with buying a new home.