For many of us, homeownership represents the American dream. However, the decision to buy a home should not be considered lightly because it requires significant investments of time and money.
If you’re planning to buy, you probably have several good reasons of your own, but here are a few of the most common benefits:
Owning your home can be a great investment for a variety of reasons.
Renters usually have to deal with rental increases year after year. Homeowners who have a fixed-rate mortgage know their payments for principal and interest will remain the same for the term of the loan.
Houses are likely to increase in value through the years. This increase is as good as money in the bank to the homeowner.
Homeowners get tax breaks that are not available to renters. For example, you may deduct interest paid on a home, or on points paid for your home. See your tax advisor for full details.
Still, homeownership isn’t for everyone. Some people decide that renting works best for a number of reasons. Here are some of the most common drawbacks or risks to homeownership:
Homeownership can put a strain on your finances. It may amount to more than you’ve paid in rent considering you must also pay property taxes, homeowner’s insurance and upkeep expenses.
Risk of losing money
Though it may not be very likely, there is a chance that your new home will lose value. Some homeowners have seen their property values decline dramatically during the recession of the last few years.
Repairs and maintenance
Some people decide not to buy a home because they don’t want to be responsible for mowing the lawn, repairing the roof, or maintaining any of the inside or outside of the property.
Those who own a home have less mobility than renters. It takes a lot more time, energy and money to put a home up for sale than to give notice to a landlord.