Commentary by J R Weinger
The debate over which option is best, to own a home or to rent one is hardly a new topic of discussion. Whenever the question is raised as to which choice is better you are going to get a vast array of answers as well as supporting arguments for and against each choice. This means that you have a wealth of resources to utilize to help you decide which choice best suits your individual life. While there are some specific perks that are associated with renting vs buying, and vice-versa, that certainly does not mean that one choice greatly outweighs the other on a universal level.
Opportunity to Build Equity
Equity is the difference between what you owe on your mortgage and what your home is currently worth. As a homeowner you will build equity over time as you pay down your mortgage balances or add value to your home. This is an important piece of the pie as a homeowner since the equity you work to build can also be used to borrow money in the form of either a home equity loan or a line of credit.
Dipping into your home’s equity can be beneficial for reasons like freeing up cash for a home renovation or finding ways to consolidate debt. Since this option typically has lower interest compared to credit cards as a homeowner you have this option whereas a renter would not. Keep in mind however that just as with any loan there are qualifying factors that may take time to earn so if this is something that you think you may want to access in the future then start preparing early so when the time comes you are as ready to go as possible.
Owning Provides Tax Advantages
If you enter a mortgage contract, you are eligible to receive some tax benefits that can result in a significant return each year that you continue to own. This means that you are not pigeonholed into just a single-family home. You can purchase a home of any kind and qualify including a co-op apartment, a mobile home, or tiny home. Your tax return will no doubt become more complicated in terms of how you file as a homeowner vs a renter, but the deductions will be worth it. The interest off your mortgage, and your property taxes are two examples of itemized factors that as a homeowner can yield deductions.
Stable Monthly Payments
As a renter you have little to no control over your monthly living fee. In terms of that payment your landlord will have complete control over the price with each renewal of your contract. Homeowners can benefit from a stable monthly payment since the terms of their mortgage are determined up front, and a singular time. Being a homeowner has traditionally been associated with the overall idea of what ‘The American Dream’ consists of and the advantage of a consistent monthly living expense can help you to decide if home ownership is really ‘The American Dream’ as it pertains to you personally.
The views and opinions expressed in this commentary are those of the author and do not necessarily reflect the official position of Citizens Journal