Sunday, October 21, 2007

Why Buy Instead of Rent?

Buying a home is the biggest investment most people will ever make. So why should someone purchase a home instead of renting?
  • Pride of Ownership
Pride of Ownership tends to be the number one reason people purchase a home. It provides a sense of stability and security that typically doesn't come with renting and it is an investment in the future if you intend to stay there for an extended period of time.
  • Equity Buildup
An argument can be made that if you are renting you're throwing money away each and every month. When you own your own home each payment is providing an investment in your future. If home prices are climbing you build equity through appreciation and each payment reduces the principle on the loan.
  • Mortgage Interest Deductions
The tax system we have in place favors homeowners. The first half of your mortgage is interest heavy, meaning more of your payment is made up of interest than principle. Homeowners are allowed to deduct the interest on their income tax return
  • Property Tax Deductions
Property taxes are fully deductible on a homeowners income tax return as well as long as the home is your primary residence or vacation home.

There can be a number of other reasons why someone would want to own their own home instead of continuing to rent. Those outlined above come up time and time again.

Traditionally the only way someone could obtain those benefits is if they obtained a mortgage requiring great credit, a large down payment and a steady job for 2-3 years previously as well as continuing. Fortunately for the millions who are not able to obtain traditional financing yet there is a way to acquire all the benefits of homeownership without obtaining a new loan. Please see this post for information regarding how to do so via the Equity Holding Trust Transfer.

If you are in position to qualify for a new home loan than it is definitely something worth considering if you do not yet own your own home.

2 comments:

Jose said...

And the home is yours and you are the landlord!!!

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Uruguay Property said...

Buying home is 100 time better then rent, rent will increase year to year, but when you buy home you will landlord,and no fear of rent also.