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Buying or Renting, Is Cost All I Should Consider?

Why Buying a Home Is About More Than Saving Rent Money

Recent studies are showing that the incentive to buy a home may no longer be only a monetary one. With so many positive reasons supporting the decision to purchase a home, potential buyers would do well to consider the many other benefits to buying a home besides just a decrease in monthly rent. Whatever the particulars of your unique situation may be, consider the following options when you’re weighing the pros and cons of buying versus renting.

All Cards on the Table, Do I Gain in Buying a Home?

It’s true, buying a home does procure a monthly rent decrease. As a homeowner, you essentially cut out the middleman. You spend smarter by sending your monthly home payment towards a loan instead of into your landlord’s pocket. And as you chip away at your loan, you have something to show for your payments: equity and of course, the home you live in and own. But there are other benefits to buying a home.

Buying a Home Builds Equity

According to Riccardo Ravasini, the managing director of an east coast property company called Rava Realty, “buying a home is one of the smartest financial decisions you can make […] because it is inflation-protected and a physical asset that doesn’t disappear like stocks can.”

As you continue to make payments on your home mortgage, instead of shelling that money out for rent costs, you build equity in the property, which is important for long-term financial stability. Keep in mind – equity refers to the amount of your home that you own.

So, the longer you’ve been making payments on your home, and the lower your loan balance, the greater your equity. It’s a logic puzzle: the longer you spend paying a loan versus renting, the stronger your assets become.

Homeowners Enjoy Tax Breaks

There are short-term benefits to owning a home, too. For instance, each year when tax season rolls around, homeowners save money that would generally go to Uncle Sam by taking advantage of tax breaks. Here’s how it works: you can deduct the interest you pay on your mortgage from your income tax. This in turn, reduces your yearly tax burden.

Plus, finance specialists are quick to point out that homeowners often eschew paying a capital gains tax on properties where the home has a) been a primary residence for greater than two years, and b) the value increase on the home is less than a quarter of a million dollars. According to Kent Via, a finance professor at Kent State University, “that’s a benefit that trumps even a very good IRA or other tax-deferred retirement plan.”

Non-Financial Benefits to Owning a Home

But it’s not all about the money. After all, there are emotional and aesthetic benefits to buying a home that are also worth considering.

As Millennials continue to occupy a high percentage of the home-buying population, there’s a drive to curate personal, individualized spaces (there’s no doubt that social media is partially to thank for that). When someone purchases a home, they participate in the experience economy – the purchase isn’t just a brick and mortar structure, it’s an opportunity to curate a unique experience.

Don’t discredit the value of pride that comes with owning a home, either. As an owner, you can choose your wall colors, install your own permanent fixtures, and grow your home to fit your lifestyle and your family’s needs, decorating and adjusting each room based on exactly how you use it in various times throughout your life. According to Sowell & Company Realtors, “Home ownership gives you and your family a sense of stability and security. It’s making an investment in your future.”

Resources Are Available When You’re Ready to Buy

Are you sold on buying a home? It’s a daunting process, sure, but Options is here to help you through every step. We have a number of special loan programs and people at the ready to connect you to the resources you need to help you make buying a home your reality. We believe homebuyers deserve all the assistance they can get.

With that in mind, we want to introduce you to a mortgage program that’s been around for decades: the Mortgage Credit Certificate, available through Options Financial. Much of the public remains unaware of the program, but taking advantage of it means potential money saving and tax credit benefits for you.

Many loan officers are also unaware of the savings that can be leveraged via the program for qualifying buyers. The Mortgage Credit Certificate requires special certification, which we have, and are able to provide to our clients. If you haven’t owned a home in the previous three years, you meet certain income and purchase price restrictions, and you plan to live in your new Portland-area home as your primary residence, you could qualify for substantial savings.

Learn more about the Mortgage Credit Certificate from Options Financial today.

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