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Home Ownership

When considering whether to buy a home, it’s wise to answer these questions:

Do I have a continuous reliable source of income?
Have I had a stable employment history over the past two years even if there has been more than one job?
Can I keep accurate records of my expenses and the balances in my checking and savings accounts?
Is my total debt manageable?
Do I have time to take care of my home?
Are all of my regular financial obligations accounted for in my debt level?
Do I have money saved for a down payment, closing costs, and moving expenses?
Have I been paying my bills on time?
Can I explain circumstances surrounding any recent credit problems I may have had?
Have I researched resources for homebuyer assistance to help with down payments and preparing for ownership of a home?

Home Ownership

Pros

You build equity in the home over time. Equity is a share in the value of the home. When you leave a home you take that equity with you, unlike if you were paying rent. Building equity helps you plan for other long-term objectives such as saving for retirement and college educations.
You gain tax advantages. You may deduct the interest and property taxes on your federal and some state income tax returns, reducing your tax liability. Often home ownership allows the tax filer to itemize deductions on their return as opposed to accepting the standard deduction.
You can rely on stable monthly payments if you take a fixed rate mortgage option. Your payments will only change according to the changes in property taxes or homeowners insurance if you escrow these expenses in your mortgage payment.
You may develop a greater sense of community for your family and relatives. You have great control your property and can leave it on your terms. You also can get involved in shaping your community.
Your home can be a stable place for your family and relatives to live in.

Cons

You must pay for the maintenance on your home and take care of the property. A landlord does not arrange for repairs
Sometimes it may not be easy to move quickly
You must pay property taxes and homeowners insurance to live in the property

Renting

Pros

You may move quickly
When new to an area you can explore how well you like the area and where specifically you would want to own a home
Free of costs such as property taxes but you should still consider purchasing renters insurance.
Free of maintenance obligations

Cons

You don’t always have a sure place to stay because a landlord can choose not to renew a lease
None of the rent money you spend month after month ever builds any equity for you; there is no long-term value built on your behalf.
People move in and leave often which makes it difficult to build a sense of belonging to a neighborhood
There are no tax advantages to renting
The cost of the rent may go up frequently with little warning from the landlord

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