Home ownership may be more affordable and rewarding than you think! There are many advantages to buying a home and can be a better financial decision in the long run compared to renting. Here are some common advantages when you buy a home.
- Build equity and credit. When you buy a home, a primary financial benefit is that you are able to build equity and your credit. You can build equity in two ways: when the property value increases and when the amount of debt you owe on your home decreases.
Besides home improvements and routine maintenance, property values can increase due to rising prices in real estate markets. In the Oconomowoc real estate market for example, prices of houses for sale in Oconomowoc and the Lake Country area have been on the rise. This is mainly due to demand for homes in the area outweighing the supply of homes on the market.
Some benefits of building equity include:
- Receive it as cash after you sell your home
- Borrow against it with a home equity loan or line of credit
- Use it as a down payment for your next home
Some benefits of building your credit include:
- Better chance of credit card/loan approval
- Higher lines of credit
- Lower interest rates on loans/credit cards
- Fixed payments. When you have a mortgage, typically you have a fixed monthly payment. In contrast you can expect annual rent increases when you rent. Furthermore, rental rates are rising faster, especially in areas where there is a shortage of houses for sale such as the Oconomowoc real estate market.
- Tax advantages. If you rent, your Landlord is getting the tax benefits while you pay the rent. Homeowners can receive tax benefits such as deducting mortgage interest, property tax payments, and even other expenses from their federal taxable income.
- Stability. In most circumstances, you decide when to move. When you rent, your Landlord could force you to move unexpectedly such as if they no longer want to rent the property or if they want to put it up for sale.
- Freedom to personalize. When you buy a home, you can personalize it without having Landlord restrictions or having to get permission first. Owning your home gives you the freedom to do things such as paint walls and replace appliances and fixtures.
If you think you can afford monthly mortgage payments but not the initial down payment on a home, there are down payment assistance programs that you may qualify for. Check out some of the helpful resources below to learn more.