Many people are caught between the dilemma of buying or renting a home. The answers are not easy because each individual’s situation is different, and the answer may also vary depending on the prevailing market rates for buying and renting at any given time. However, with real estate rates at fairly low levels these days, buying a home offers a much better opportunity in many ways than renting for most people.
Sense of belonging
Almost everyone has a dream of having their own home one day. Owning a home gives a family a sense of permanence and ownership. For many homeowners, the value of owning and the peace of mind that comes with it is priceless. Aside from the financial advantages, there is an inherent sentimental value associated with owning a home, which cannot be evaluated in monetary terms.
Sense of financial security
When you own a home, it becomes long-term financial security for you and your family. It is a safeguard against future uncertainties of inflation and other economic conditions. If construction costs and rents rise unexpectedly in the future, the owner is not affected by such sudden conditions.
Fiscal benefits
In many cases, the interest payments on the home mortgage and even the amount of the real estate tax can be deductible from your income tax. Therefore, if you pay home installments instead of paying monthly rents, you can build your own home without too much burden on your financial capacity.
Capital appreciation potential
If you’ve bought your home in unfavorable market conditions when prices remain low, you are likely to benefit in terms of capital appreciation over a period of time. A prudent investment can allow you to accumulate or obtain a considerable and considerable return, which you cannot expect in the case of a rental home.
Better financial planning
If you have taken out a fixed rate mortgage, you know exactly how many installments you will have to pay in the future and in what amounts. You can plan your monthly budget accordingly and maintain proper and appropriate control over your finances. This may not be so easily possible in the case of the rental option because the rental is not under your control after the term of the rental agreement ends.
Improved credit opportunities
Homeowners often have a better advantage when they need to apply for loans in the future. An owner can build equity over a period of time and borrow against that value when necessary. Credit card companies and other private lenders generally favor homeowners for disbursement of credits and loans.
Private mortgage insurance *
If your down payment on your home is below 20 percent of its sale value, you can obtain private mortgage insurance (PMI) from your lender. PMI helps you purchase a mortgage with a lower down payment by protecting the lender against any defaults on your loan. PMI offers an excellent advantage to people who want to own a home rather than rent it, but do not have substantial financial resources available for a larger down payment.
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* http://www.bankrate.com/finance/mortgages/the-basics-of-private-mortgage-insurance-pmi.aspx