There are great advantages to owning a house. But there are also a lot of responsibilities: repairs, taxes, insurance and utilities. Weighing these against the advantages helps make the decision of buying vs. renting more clear.
When you own your home, you can turn it into your ideal living space. Unlike renting, you have the freedom to renovate, remodel and even expand.
With a fixed-rate mortgage, your principal and interest payment will stay the same for the life of your mortgage. That means you’ll never have to worry about your landlord increasing your rent at the end of your lease. The only things that could change are taxes and homeowners insurance.
As you pay down your mortgage, you build equity in your home. In time, you may be able to use your home equity to take out a line of credit for home improvements, pay down debt or put toward other financial goals.
Once you have made all of the mortgage payments, you will own the house. The only payments you'll need to make are to pay your taxes and insurance. Renters will have to pay rent every month indefinitely.
Depending on where your home is located, what kind of home you have and economic conditions, your home may become worth more than you paid for it.
You may be able to deduct mortgage interest and your local property taxes at tax time. That could save you a lot, especially in the early years of your mortgage, when your payments will be mostly interest. Renters don’t get this tax break. Consult your tax advisor about your personal situation.
If you have a leaky sink, you can call the landlord to fix it. If you own the home, you have to hire a plumber, or fix the leak yourself.
A lease can be a short-term commitment. When it expires, renters are free to go. As a homeowner, if you want to move, you’ll have to find someone to buy or rent your home.
While your home could go up in value, it can also go down, as many did during the financial crisis that began in 2006. If your home loses value and you need to sell, you’ll need to repay the amount of your mortgage even if your home is worth less in the current market.
Results of the mortgage affordability estimate/prequalification are guidelines; the estimate isn't an application for credit and results don't guarantee loan approval or denial.
All home lending products are subject to credit and property approval. Rates, program terms and conditions are subject to change without notice. Other restrictions and limitations apply.