As you weigh your options between renting or buying a home, you may wonder which one is a worthwhile investment. Depending on who you ask, some might say that renting a home is a waste of money, while others say that renting is the cheapest option. Among the vast array of opinions, there are pros and cons to both; however, mortgage payments do turn out to have more benefits to offer.
Mortgage payments can help you grow wealth. When you make monthly mortgage payments on your home, you build equity in the process. With equity, you can start building financial freedom to renovate your home and more!
However, if you do not plan to stay very long in your location, renting a home may be the best financial option for you. When making payments towards rent, you are not gaining any long-term benefits from your investment as you could be in a home, but renting may suit your needs until you find a place to live long=term.
With a mortgage, there are no surprises, your terms and interest rates are set in stone once you sign the initial paperwork. Along with the benefit of consistent payments, homeowners also have loans and other financial resources available to help them achieve their goal of becoming a homeowner.
Renters, on the other hand, do not have much assistance. The rate that the landlord sets can change, causing financial uncertainty and strain as the landlord could also ask you to move out before you had planned to.
Homeowners can take advantage of the benefit of having a mortgage payment during tax season. Using their deductible mortgage interest, homeowners can take tax deductions.
Rent payments, on the other hand, do not usually come with tax benefits, but there are some exceptions, such as renters who work from home or pay property taxes as part of their lease.
Depending on your personal circumstances, renting a home or buying one may be the best financial option for you. The American Dream aims to help you achieve the home of your dreams in the simplest way possible. For more information about how homeownership compares to renting, contact your local real estate agent today!