Advantages of buying a house over renting
Many people are caught between the dilemma of whether to buy a home or rent it. The answers are not easy because the situation of each individual is different, and the answer can also vary depending on the current market rates for buying and renting at any given time. However, with real estate rates currently quite low, buying a home offers a much better opportunity in many ways than renting for most people.
Sense of belonging
Almost everyone has a dream of owning their own home one day. Owning a home gives a family a sense of permanence and ownership. For many homeowners, the value of owning a home and the peace of mind that comes with it is priceless. Aside from the financial benefits, there is an inherent sentimental value associated with owning a home that cannot be evaluated in monetary terms.
Sense of financial security
When you own a home, it becomes a long-term financial security for you and your family. It is a safeguard against future uncertainties from inflation and other economic conditions. If construction costs and rents unexpectedly increase in the future, the owner will not be affected by such sudden conditions.
In many cases, home mortgage interest payments and even property tax amounts may be deductible from your income tax. Therefore, if you pay installments on your house instead of paying monthly rents, you can build your own house without too much burden on your financial capacity.
Capital Appreciation Potential
If you’ve bought your home during unfavorable market conditions when prices hover around low levels, chances are you’ll benefit in terms of capital appreciation over a period of time. A prudent investment can allow you to accumulate or obtain a strong and considerable return, which you cannot expect in the case of a rented home.
Better financial planning
If you’ve taken out a fixed-rate mortgage, you know exactly how many installments you’ll have to pay in the future for what amounts. You can plan your monthly budget accordingly and keep proper and proper control over your finances. This may not be possible as easily in the case of the rental option because the rent is not under your control once the term of the rental agreement ends.
Improved credit opportunities
Homeowners often have a better head start when they need to apply for loans in the future. A homeowner can build equity over a period of time and borrow against that equity when needed. Credit card companies and other private lenders often favor homeowners for disbursement of credit and loans.
Private Mortgage Insurance*
If your home’s down payment is less than 20 percent of its sales value, you can get private mortgage insurance (PMI) from your lender. PMI helps you purchase a mortgage with a lower down payment by protecting the lender against any default on your loan. PMI offers an excellent advantage to people who want to own a home instead of renting it, but do not have substantial funds available for a larger down payment.