Pros & Cons of Buying a Home

Many Realtors love to discuss the cons of renting and why it is always smarter to buy. Depending on your lifestyle, finance, credit and other factors, maybe buying is not for you. Here, I break down the pros and cons of buying a home.

PROS

  • Long term benefits — security, equity and potential growth in personal wealth just to name a few.
  • You can earn a profit when you decide to sell in the future since homes increase in value and build equity over time.
  • Costs are more predictable than rent because you will most likely have a fixed-rate mortgage.
  • Interest and taxes are usually tax deductible.
  • You have creative control over your home — you can perform upgrades, enhancements, landscaping, decor, etc.
  • Being a homeowner who ensures that monthly mortgage payments are made on time can improve your credit score. Not only will you have a large investment to your name, but paying your mortgage on time increases your credit score.
  • You have the option to refinance your home loan should you wish to pay for a large expense (i.e.: wedding, an investment property, etc.)It’s yours! Instead of paying your landlord’s mortgage, you’re now paying your own!

CONS

  • Long-term financial commitment
  • You’re responsible for all maintenance and repair costs on your home
  • There is a lack of flexibility. You may not be able to just “pick up and leave” as if you were to rent
  • Higher upfront costs than renting — down payments, closing costs and moving expenses
  • Due to economic factors such as a recession or high interest rates, you run the risk of not making any profit through resale. This can also happen if the house is located somewhere that is becoming less desirable.
  • Foreclosure! — In the event you don’t pay your mortgage, the home is collateral.

Homeownership is not for everyone and requires that you have stable or growing income. Although owning a home is huge responsibility, the financial benefits of homeownership are longterm and promotes wealth-building and stability. I mean, let’s face it. There is a reason why all millionaires own and invest in tangible real estate…