Should You Buy a Home or Rent?
Transcript: Should You Buy a Home or Rent?
For some people, buying a home makes the most sense. But for others, renting a home is a better option.
This is an important question to answer and there are advantages to both. So DCU would like to share some information that could help you decide.
Let’s start with reasons to consider renting.
Number one: renting is usually less expensive overall and requires less money up front than buying a comparable home in the same area.
Second, consider how long you plan to live in the house.
Because of the upfront costs and the down payment funds your mortgage will require, if you don’t think you’ll live in your home for at least five years, then renting might be a smarter way to go.
Third, there’s more flexibility with renting because it’s easier to pick up and move.
Keep that in mind if you’re uncertain about job security, think you might be transferred or just want to change neighborhoods.
And finally, you’ll avoid maintenance and repair costs, and real estate taxes.
Because when you rent, your landlord is responsible for those things.
So, what are the reasons to consider buying a home?
First of all, every dollar you put towards your mortgage loan’s principle increases your equity: the amount of the home’s value you actually own.
Your equity is the difference between the current market value of the home, less any mortgage loans. Your equity builds over time as you pay down the principal balance of your loans and if the value of your home increases, your equity will too.
Buying a home can lead to tax benefits because in most cases your mortgage interest and real estate taxes are tax deductible. Consult your tax professional.
When you buy a home at present market prices, you’re protected if home prices increase in the future. And if you have a fixed rate mortgage, your monthly payments will be constant. A landlord, on the other hand, can always raise your rent.
When you have a feeling of ownership, you’re more likely to invest in your home to make it the perfect place to live, raise a family, or spend time together.
Finally, when you’re in a neighborhood with other homeowners, you’re likely to become more involved with the people and the programs in your community.
So, to sum up:
Renting a home requires less financial commitment, gives you more flexibility and can be less expensive overall. Buying a home can build equity, has tax benefits, offers cost protection, and gives you a sense of community and permanence.
Whatever you decide, remember: DCU is always here with the expertise to help you make the most informed decision possible as well as prepare for future plans.
For more information, call one eight hundred three two eight eight seven nine seven, go to DCU dot org backslash mortgage, or a DCU branch.