Buying a home is a big commitment, one that takes time, energy, and money. As ready as you think you are to take the plunge into home ownership, it’s always worth taking one last look at the pros and cons of buying vs renting before you make a final decision.
Pro: You’re Building Equity
Even if you’re lucky enough to have very low rent, the money you pay your landlord every month is still money you will never see again. When you make payments on a mortgage loan every month, those payments go back into the value of your home, building up equity. That’s equity you can actually use when you sell the home, or for collateral on a loan or a second mortgage if you need one. The equity you build up in a property is real, tangible, and can be of incredible value to you when the home is paid off.
Con: You Have To Come Up With A Down Payment
Even though the down payment is part of that equity, it’s usually a lot of money to provide upfront, especially when you’re already pouring money into rent every month. Even if a bank offers you a mortgage that requires less than a 20% down payment, a smaller fraction of a lot of money is still a lot of money. Saving for a down payment on a home purchase is a big financial commitment, and might mean making changes to your budget and lifestyle that are not comfortable or pleasant for you.
Pro: Home Ownership Gives You Freedom
Maybe you want to replace all of your stairs with amusement park-worthy slides, adopt 17 rabbits from the local shelter, or paint every wall a different color. Perhaps you’d love to build a massive fire pit in the backyard or install a custom dishwasher from Luxembourg in the kitchen. Whatever your unique plans may be, chances are they will not be part of any lease agreement. When you own a home, you can do whatever you like with the space. You are your own landlord. As long as you don’t do anything illegal or endanger your neighbors, your home is your oyster.
Con: You’re Responsible For Damage And Repairs
If you’re renting an apartment, there’s probably a maintenance number you can call if your ceiling starts to leak or your toilet won’t flush. When you own your home, you don’t have that lifeline. Many repairs required require specific skills to remedy – skills you may not have. Building up a network of reliable contractors and handymen can help you get things fixed quickly if you need it, but there’s no landlord making the calls for you, and you have to pay for everything yourself. If you buy a house that eventually needs significant repairs and updates, Herring Bank does offer home improvement loans for that type of situation.
Pro: Your Rent Will Never Go Up Again
The best part about owning a home is this: as long as you have a fixed rate mortgage with a reputable lender like Herring Bank, you will never pay more per month than you do for your very first monthly mortgage payment. Landlords have the liberty to increase rent every time a lease is renewed. A mortgage payment, on the other hand, stays exactly the same for the life of the mortgage. What seems like a large monthly house payment now won’t seem nearly as bad in 10 or 20 years when inflation has increased your income but your monthly payment has stayed the same. As long as you are careful with your budget now, and only buy what you can afford, owning a home usually becomes easier as the years go by.
Herring Bank makes it easy to buy a home. We have a full array of mortgage options for you. Visit us online to learn more about home ownership.