Mortgage Myth: “Renting a home is cheaper than buying a home in the long run.”

Mortgage Myth: “Renting a home is cheaper than buying a home in the long run.”

Truth: Renting and home ownership come with their own unique benefits. In deciding which route is right for you, it is important to assess your financial position, as well as your personal goals and aspirations.

From the growing family looking to lay down roots to the enthusiastic dog mom with big backyard dreams―buying a home can represent a milestone, or simply a better way to invest your money.

Not sure what is right for you?

Here are a few important considerations when deciding whether to buy or rent:

Property Values: As a homeowner, any improvements made to your house that could result in an increased property value may end up right back in your pocket if/when you choose to sell. As a renter, rising property values typically mean an increase in your cost of living, without the eventual payout.

Tax Breaks: Hoping for a little kick back at the beginning of the year? Deducting mortgage interest payments could be one of the most significant tax incentives to owning a home. When homeowners make these deductions, their federal income tax can be cut, potentially reducing their taxable income by the amount of mortgage interest paid.

In short, property taxes allow homeowners to lower their taxable income while rent is not tax deductible.

Equity: When making mortgage payments, you’re building equity in your home. Accrued over time, equity can be used for a Home Equity Loan or a Home Equity Line of Credit (HELOC). While you can spend these loans on just about anything you’d like, many opt to invest in another property or make sizable home improvements. The latter can increase property value and, as we have already learned, may result in a higher profit when it comes time to sell.

Renting, on the other hand, does not build equity… for the renter.

Quality of Life: Whether you’re fueled by the desire to paint and remodel or adopt a few furry friends, owning your own home enables you to make decisions without waiting on the approval of a landlord. Buying a house will not only free you from the uncertainty of climbing rent rates, it may lay a solid foundation for your future financial health.

Are you ready to buy? At Summit Mortgage Corporation, we make the home loan process simple. Our local senior mortgage bankers work by your side throughout every step of the home buying journey. Have questions? Give Us a Call today to get started!

Leave a Reply