Owning a home is the culmination of a long-yearned dream for many people. However, for some others, it could be a harrowing experience. Undoubtedly, buying a house is one of the biggest investments one can make in one’s life. Hence, it makes sense to consider the advantages and disadvantages of owning a house before you decide to buy.
Here we discuss the advantages and disadvantages of owning a home, based on your personal choices, general financial condition, and future plans.
Pros and Cons of Buying a Home
At the outset, consider how buying a home will impact your financial position and your lifestyle. It would help in reviewing all the advantages and disadvantages of owning a home before inking the deal for that big commitment.
The Advantages
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Increased privacy.
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The value of homes appreciate with time, increases equity, and builds up a nest egg.
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There are predictability and stability of costs with new construction in Houston or elsewhere than renting as it depends on a fixed-rate mortgage.
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You get a tax deduction for the property tax and interest portion of your mortgage payment.
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You feel proud to own a home.
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There are affordable options like buying a lower cost home.
The Disadvantages
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Owning a home is a long-term financial commitment.
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You have to bear all the maintenance cost on your home. Hence, you may have to bear the cost of simple repairs like fixing a bathroom pipe to such complex repairs like kitchen renovation.
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You are tied to your community when you own a home, and it becomes difficult to leave a location whenever you feel like.
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In spite of the mortgage payment being generally fixed, they are usually higher compared to rent payments.
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Buying a home includes down payments and closing costs.
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The value of the newly bought house may not appreciate, especially in the first couple of years.
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If home equity is used to borrow, for example with debt consolidation, you could be left ‘house poor’.
Advantages of Renting a Home
As per your financial condition and style of living, there are certain advantages to renting. These include:
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Renting is a cheaper option than purchasing a home. You will be paying less for your rent than a comparable house payment. In addition, your utility costs may also be covered in your rent.
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You get more flexibility in renting a home. As leases are mostly for 12 months, so if there is frequent need to move your house due to your job, renting can be a great choice than owning.
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The responsibility for most maintenance and repair work on the house lies with the landlord.
Disadvantages of Renting
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You don’t get any tax break for renting a home. While filing your tax returns, you will be unable to claim any deduction for mortgage interest and property taxes.
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Your rent will likely be growing over the years. The housing cost is not a fixed sum as it is with a fixed-rate mortgage.
