THE HOUSING COUNSELING AGENCY
25 YEARS OF EXCELLENCE
Advantages And Disadvantages of Owning your Home
Save Money at Tax time Building Home Equity Pride of Ownership Advantages of Renting Disadvantages of RentingThere are many advantages of owing your own home. Before you and your family decide to make such a long term commitment.
Homeowners are rewarded by the federal government, and by many state governments. As a homeowner, you can deduct your mortgage interest and property tax obligations every April 15.
Home equity accounts for the portion of your home or property that you actually own, and as you make your mortgage payments every month, your equity continues to rise. You can consider it as a type of savings account, where your house continues to appreciate, and your loan amount continues to decline. Your equity is that difference between the property value and your outstanding loan amount.
Pride of ownership is the number one reason why people yearn to own their home. It means you can paint the walls any color you desire, turn up the volume on your CD player, attach permanent fixtures and decorate your home according to your own taste. Home ownership gives you and your family a sense of stability and security. It's making an investment in your future.
- Work needs to be done by you--or paid for by you
- Generally a larger initial investment--the downpayment
- Equity may go up, down, or stay stagnant
- There is generally less work in maintaining a home or apartment
- Smaller amount of "up-front" cash
- When the lease is up, you can just move
- No matter what happens with the value of the home, you will never gain equity
- Limited--or no--ability to personalize your living quarters
- No tax advantage to renting. Your landlord gets any and all tax breaks that are available
Tip: The benefits of buying a house outweigh the drawbacks for most people, but be sure to consider your purchase from a long term perspective of owning the home for at least 5 years.
Tip: The disadvantages of home ownership can be overcome by planning. Else, what should be one of the most satisfying decisions in your life could become your biggest mistake.
NID-HCA is a diverse network of advocacy groups and individuals, organizations, housing counselors, real estate professionals, community groups, civic organizations and faith-based organizations committed to ensuring fair housing opportunities for all in urban/minority communities throughout the country. As an advocacy, communications, education and resource network, NID-HCA works to provide its partners and the communities they serve with information to assist them in their advocacy efforts to address issues ranging from increasing access to quality housing and mortgage products and eliminating housing disparities.
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