Let your next payment be for your mortgage, not your lease.
Life is filled with leaps of faith: marriage, babies, career changes—and one of the biggest is homeownership. It’s a huge decision—and a ton of work—to buy a house, so it’s not surprising that so many of us are renting, telling ourselves year after year that it will be the last time we sign a lease renewal.
If you’ve been feeling the itch but aren’t sure whether it makes more sense buy instead of rent, read on for some practical reasons why taking the leap makes all the sense in the world.
1. Home Ownership Builds Your Wealth
Whatever the market value of the home, it becomes a key part of your financial profile,” says Jacquette M. Timmons, a New York-based financial behaviorist.
Bonus: Your real estate is an asset, making you more attractive to creditors and lenders, too.
2. You’re Saving Money
Believe it or not, in 42 of the 50 states it is less expensive to buy instead of rent. Plus, what you’re spending on your home is similar to a forced savings plan (who doesn’t need to save more money, right?). “You are investing in yourself with a mortgage,” says Hunter Fendley, Bungalo’s Managing Broker. Even though a percentage of each month’s mortgage payment is going to the bank to pay off interest, the majority of your payments are building equity.
3. Crazy Rent Hikes Don’t Apply to You
We’ve all heard stories of having a reasonable monthly rent become out of reach when that lease renewal is slipped under the door. Once you buy, your mortgage payments will not be subjected to someone else’s whims—not even the bank’s if you get a fixed-rate mortgage (the interest rate you get when you take out the loan will not change for the length of the mortgage). When you buy instead of rent, that peace of mind will give you control over how to budget and structure your financial life moving forward.
5. Owning is Good For Your Taxes
Though the rules vary from state to state, owning property will help at tax time. “There are valuable tax benefits to buying,” Fendley says. “You can write off interest on your mortgage and your property taxes.”
6. Turning a Daydream Into Reality Feels Amazing
“There is a psycho-emotional benefit to home ownership,” says Timmons. It feels good to know you saved the down payment. It feels better to walk in the door and know that the home is yours.