Rent or Buy
There are several benefits of buying a home compared to renting:
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Building Equity: When you buy a home, you create equity in the property as you continue paying off your mortgage. This means that over time you own more and more of the home. This is in contrast to renting, where you are essentially paying the landlord's mortgage.
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Stable housing costs: When you own a home, your monthly housing costs are typically more stable than when you rent. Your mortgage payment is set, with the only variables being the taxes and insurance (if you have a fixed-rate mortgage), while rent payments can increase over time.
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Greater control over your living space: When you own a home, you have greater control over your living space. You can make changes to the property to suit your needs and preferences, such as painting, remodeling, or landscaping. You also have the ability to rent out a room or the whole home. When you are the renter, you generally have to get permission from the landlord before making any changes, such as painting or adding fixtures.
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Potential tax benefits: Homeowners may be eligible for tax deductions for mortgage interest payments and property taxes, which can help reduce their overall tax commitment. Talk to any of the loan officers working on your mortgage application for more intel!
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Potential long-term financial benefits: Owning a home can be a good long-term investment, as property values tend to appreciate over time. This is typically in the 4-8% range, although, in the Nashville area in 2021, the appreciation was more like 30-50%. This can help homeowners build wealth and provide a source of financial security in retirement or use the equity to leverage the value you have in a home.
- Building your credit rating: By paying your mortgage monthly without missing any payments, you can build your credit rating, which has benefits when buying other items on credit.
You can also use the Rent Versus Buy Calculator.
This will show you how much renting will effectively cost you as opposed to buying based on the equity created by appreciation and payments. CLICK HERE