Homeownership is something that many of us dream of. Owning a home means putting down roots and having a space that is truly yours. For many people, owning a home is the fulfilment of the dream, while for others, it is their worst nightmare. It’s a significant moment of your life when you finally own a home. However, owning a home can be really challenging as well as frustrating because of the responsibilities that come with it in addition to the initial process that it takes to get there.
Buying a home is one of the biggest financial decisions you will make in your life. When you think about buying a home, many questions will come to your mind. It’s important to consider how your finances and lifestyle shall be affected by this decision. It makes sense to review all of the advantages and disadvantages of becoming a homeowner before making this big commitment.
Here, we have listed out some points that will help you examine the pros and cons of owning a home, based on your personal desires, future plans and general financial position:
Benefits of Owning Your Own Home
There are many financial and personal reasons as to why you should own your own home rather than rent. The obvious reasons include pride of ownership, building your own equity instead of someone else’s, no more landlords, and of course, the tax benefits you reap.
When you own a home, you will feel close to the community. You would begin to feel more attached to the city and its people. You will find yourself more involved with community events like what is happening with the schools, roads and shopping centres in your area.
After you own a home, you will find yourself in more control of your immediate surroundings.You can change things and decorate as you wish without worrying about the limitations of the landlord. The home is yours. You can upgrade and add new amenities that appeal to your lifestyle. You do not have to ask for someone else’s approval if you think to remodel the house. Your home truly is your castle.
Feeling of Pride
Another important aspect that cannot be overlooked is the pride that you feel when you own your own home. Once you buy a house, you will be able to prove that you can achieve any monumental goals and can give your family the security and commitment it needs to move forward in life. Once you have built up equity in your first home, you can leverage your equity to buy a nicer home later.
Homeownership is an Investment
A home is an asset which increases in worth over time. While you continue paying your mortgage each month, your debt amount goes down whereas the value of your home would continue to rise. This creates a better reinvestment opportunity.
Investment and equity are two related things. As you make mortgage payments each month, part of the payment goes toward the interest, while the rest pays down the principal balance. Paying the principal is like depositing money in the bank because that money becomes available for reinvestment in the home itself or a new home.
Take Advantage of Tax Benefits
The federal government encourages homeownership by offering tax incentives for homeowners. The biggest one is the option to deduct interest from mortgage payments on your income tax return, especially at the start of a mortgage when most of the payment is applied to the interest.
Homeownership increases sustainability and stability. If you are staying at rent, it can mean that you never really know where you will be living for the next few years or what will your expenses be. Staying in the same home provides a better financial and emotional investment in both your community and living space. So, before you plan to buy a house you should do a bit of research and consider all the pros and cons of buying your own house. However, having your own house is much better than staying at rent.