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Home Ownership: Pros And Cons

Many people consider purchasing a home at some point in their lives. Others choose to remain as renters, and enjoy the lessened responsibilities of having a dwelling where they aren't responsible for repairs. However, for those considering taking the step toward home ownership, now is an excellent time to buy. Still not sure? We have a list of pros and cons to help you decide.

Pros of Homeowning

• Equity: Simply by paying your mortgage, you are building equity in a place of your own. Equity is the portion of the property that you actually own, and increases with your monthly payments. Your home may also appreciate in value over time.

• Tax Benefits: When you become a homeowner, you are eligible for a deduction on your federal and state income taxes for the amount of mortgage interest and real estate taxes you pay each year.

• Retirement Savings: Long-term home ownership can provide great retirement security through the growth of equity. Some may even choose to take out a reverse mortgage on their home, which allows you to draw on the equity of your home and receive a monthly income.

Cons of Owning a Home

• Nothing is set in stone: Even if you work hard at upgrading and maintaining your home, property values can drop unexpectedly. Doing research before you buy can help you choose a house and neighborhood that have strengthening value in the real estate market.
• Being a homeowner can cost more than renting: Combining the cost of your mortgage payment with the expenses of routine home repairs and maintenance--not to mention emergency repairs such as a new water heater--and you'll find that the amount surpasses most rent amounts.
• Potential loss of property: If you lose your job and fail to keep up with mortgage payments, the mortgage lender could demand payment in full or foreclose on the mortgage. This could result in the loss of your home in addition to the equity you've built.
• Limited mobility: After you purchase your home, you may not have much flexibility in choosing a new location to live or work. If you do move, you may find yourself paying two mortgages until you sell your first home if your loan is not paid off.

Everyone's decision should suit their personal needs and budget, and the choice is unique for everyone. If you decide to take the path to homeownership, here are the steps involved in the path to owning a home:

1. Determine whether you want to rent or buy.

2. Determine a price you can afford.

3. Choose the kind of home you desire.

4. Begin pre-qualification.

5. Begin the house hunt/select a home.

6. Apply for a mortgage.

7. Inspect the house/personal checklist.

8. Make an offer.

9. Get a professional inspection.

10. Close the loan.

11. Move in.

At Lender411, we can get you started on this path with a wealth of tools, articles, and calculators that will give you an advantage!

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