“Should I buy a house?” It’s a big question, with a lot of variables determining the answer. But don’t worry! We’re here to help simplify it with our top 10 benefits of owning a home. From tax benefits to home equity, there’s a lot to love about homeownership.
Should I buy a house? 10 reasons to say “Yes”
- Long-term stability
- Room to grow
- More privacy
- Control over your space
- Consistent budgeting
- Ability to build home equity
- More potential tax benefits
- Opportunities to grow your credit score
- Unique financing options to fit your lifestyle
- Potential to refinance for better terms down the line
1. Long-term stability
If you’re not ready to put down roots, renting can often be the best fit for you. But when you find the place you can see yourself living for the long term, you can’t beat the stability of homeownership. Depending on your loan terms, a mortgage is typically a 15 to 30-year commitment. Even if you sell your home before the mortgage term is complete, it takes at least a few years of staying put for your home loan to be a good investment. That’s years of getting to know your community, settling into your space, and not living with one foot out the door wondering where you’ll live next.
2. Room to grow
Kids. Pets. Plants. Whatever you want more space for, owning a home can deliver. And while apartments are limited to the square footage on your lease, your home has the potential for additions and renovations when your needs change (and if you do decide to renovate, there’s a loan for that).
3. More privacy
Sharing a wall with neighbors is, as the kids say, “not it.” One of the biggest benefits of owning a home is the privacy of a space that’s truly yours, both indoors and out. Especially with more people working from home, having your own quiet, dedicated space is a game changer.
4. Control over your space
One of the biggest downsides of renting is having to leave the space as you found it when you move out. You also have to adhere to the landlord’s policies. When you own your home, you can decorate it however you want, fill it with as many pets as you want, and generally make it feel like home. Just keep in mind that if your neighborhood has an HOA, they may have a few guidelines you’ll need to follow.
5. Consistent budgeting
If you’ve been renting long enough, you’ve probably noticed that rent rises every time you renew your lease. Between that and miscellaneous amenity fees and utilities, it can be hard to budget consistently when you rent. With a fixed-rate mortgage, you can rely on the same monthly payment due every time, until you pay off the loan or refinance for a new rate.
6. Ability to build home equity
This is one of our favorites. Home equity is the amount of your mortgage that you’ve paid off. In other words, the percentage of your home that you own. Unlike monthly rent, every payment you make on your mortgage gets you closer to paying it off entirely, all while your home equity keeps accumulating. And even though renovations may seem expensive upfront, those actually boost your home equity, too. If you need to, you can also leverage your home equity for more flexible funds with a cash-out refinance.*
7. More potential tax benefits
Taxes aren’t anyone’s favorite subject, but you’ll want to hear this one. When you switch from renting to homeownership, you could potentially qualify for more tax benefits like:
- Mortgage interest (applies to the interest paid on the first $750,000 of your home loan)
- Discount points (pre-paid interest on your mortgage)
- Property taxes (exact amount depends on where you live)
How much you can actually write off will depend on your unique financing situation.**
8. Opportunities to grow your credit score
Not only are there plenty of home loans that don’t require a high credit score, but each monthly payment you make helps improve your credit history. You can even leverage that healthier score down the line to get better terms when you refinance your mortgage. Win-win.
Pro Tip: Got credit challenges? We’ve got strategies to help you navigate them here.
9. Unique financing options to fit your lifestyle
Rent is, well, rent. Not much about it changes regardless of your circumstances. When you apply for a home loan, you can choose from a wide variety of mortgages that are actually built for your unique goals. For example, many first-time home buyers enjoy the flexible down payment and credit requirements that FHA loans offer. If you’re not quite ready to take on a house, a condo loan is a great way to transition. And if you qualify, VA loans offer some of the best benefits around.
10. Potential to refinance for better terms down the line
Even though a mortgage is a big commitment, it’s actually more flexible than you think. The rates you have now don’t necessarily have to be the rates you have forever. As you build home equity and credit, you can eventually leverage that to refinance your loan for different rates or cash out. You can even refinance to a different mortgage type altogether (from FHA to Conventional loan is a popular route).
Are there any reasons I should NOT buy a house?
The answer to “Should I buy a house?” really comes down to whether or not the timing is right for you. A mortgage can involve more upfront costs than renting, and a home loan application is a lot more involved than applying for a rental. When you own, you’re also responsible for any maintenance issues that arise. So, if the flexibility of renting still outweighs the commitment of a home purchase, now might not be the right time for you. Just remember that even if you’re not looking to buy a home now, it’s never too early to start planning for it.
*Using your home equity to pay off debts or make other purchases does not eliminate the debt or the cost of the purchases, but rather increases the loan amount of your mortgage to be paid according to your new mortgage terms.
**This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before making the decision to buy or refinance a home.
