If you’ve been renting a house or an apartment for a while, sooner or later you’re going to think about buying a home. Depending on your state of life, your financial position, and your career situation, buying a home may be an advantageous choice for you. 

When you rent, you have very little financial responsibility for the maintenance and upkeep of the property. Basically, all you need is a good renter’s insurance policy. If the plumbing springs a leak, it’s the responsibility of your landlord to fix it and pay for the costs. Of course, if your landlord is lax and unresponsive, you’ll have to live with the problem until your he or she sees fit to have it fixed. And even if you do have it fixed yourself, there’s no guarantee that you’ll recoup your costs, unless it’s written into the rental agreement.

Most people rent because they think it’s the least expensive way to go. But as your family grows and your life situation evolves, the advantages of renting diminish and the benefits of buying can increase sharply. For example, when you pay your rent every month, that money goes to your landlord. You derive no benefit from your payment. However, when you purchase a home, your monthly mortgage payment accomplishes several things.

  • You build up equity in your home
  • You derive significant tax advantages from home ownership
  • Your timely mortgage payments can positively affect your credit score
  • While paying your mortgage, your home is an appreciating asset
  • Homeownership is one of the most traditional ways to build wealth

With interest rates near historic lows, your mortgage payment may be very close to your monthly rental payment - or even less. And unlike your rental payment, which most likely will go up every year, if you have a fixed-rate mortgage, your monthly payment is fixed for the life of your mortgage loan. 

Finally, owning a home gives you some important intangible benefits. You experience a sense of belonging and being vested in your community. You derive the pride and satisfaction of home ownership. Unlike renting, you have the freedom to make improvements and refurbishments so you can craft a home you love without the restrictions of renting. 

When it’s time to buy your first home, be sure to work with a trusted and seasoned realtor who will streamline the process and make it stress-free.