If you're resolution is to get into a new home this year, it's important to understand which is a better option for your lifestyle, finances and future plans. Both renting and buying have a lot of pros. Meet them now.
For many, renting is the ideal choice. Here's why:
- Freedom from maintenance. If you like the idea of having someone else handle the larger home maintenance issues, then renting may be right for you.
- Flexibility. You can move relatively quickly and easily when you rent. You may only have to give one or two months of advance notice to your landlord about moving, especially if you are renting month–to–month.
- Protection from house price declines. If home values decline you won't lose equity or run the risk of owing more on your mortgage than your home is worth.
- Living in high–cost areas. Renting may make sense if you want to live in the city or other high-cost area where it's expensive to buy.
- Sense of community. Many renters say that they appreciate the sense of community that comes with some rental communities.
Owning your home is considered the American Dream by many, and here's why:
- You can take pride of ownership. You'll have a place that is uniquely "yours" that you can customize — from paint colors to major remodeling projects.
- You may have some tax benefits. You may be able to deduct the interest on your mortgage and property taxes. These tax savings may offset a portion of the cost of owning your home.
- Your monthly payments will remain stable. With fixed–rate mortgages, your monthly principal and interest payments will stay the same for the entire period of the loan. This will make it easier to plan and budget — whereas rental rates may rise over time.
- You have the opportunity to create equity and enjoy stability. Owning your own home may be a great way to create equity for the future and provide stability and security for you and your family
Overall, buying a home can be a good investment but you need to remember you will become your own landlord. You are now responsible for the maintenance and upkeep of your home and property.
Follow this series to get more information about getting into a new home this new year and visit My Home by Freddie Mac where we discuss it all.