Owning a home is the American dream for most people. You'll have to decide what is best for you depending on your situation. Here is a simple breakdown of the advantages and disadvantages of buying a home versus renting one:
Buying:
Advantages
Disadvantages
If you have a fixed rate loan your payment will remain the same. (Except for property tax and insurance which may go up or down each year.)
You must make the monthly mortgage payment every month. Not making the payment could affect your credit rating.
Your loan balance will decrease over time.
If you wish to move, you might have to sell the home or consider renting it out to someone else.
The value may increase over time, providing enough of a down payment necessary to move up to a larger home.
The value could decrease
If this is a home that you will live in, you will be able to write-off mortgage interest and taxes. (Please consult an accountant for more information)
You will be responsible for any improvements, repairs or upgrades to the home.
You can change the look and feel of your home to your liking.
The down payment can be considerable.
Renting:
Advantages
Disadvantages
If something breaks, such as a refrigerator, you usually are not responsible for replacing or repairing it.
No hedge against inflation and you are subject to current market rental rates.
If you are not happy with the look of your place, you can move to a new location very easy.
If property values increase, you won't benefit.
You might have access to public pools and recreation rooms at no additional cost.
