Wednesday, September 9, 2015

Buying a Home vs. Renting One

Since the financial crisis in 2008, prospective homeowners are looking more closely at the costs and benefits buying a home. However, the drive to become a homeowner is still very strong. While homeownership may make sense financially, there are an assortment of social and family reasons that also come into play. When deciding whether or not homeownership is right for you, consider these points:

REASONS TO BUY


1. Equity 


When you're renting, you are helping your landlord gain equity in the property. On the other hand, if you have a mortgage at the Lake of the Ozarks, you're increasing your own equity.  If you intend to stay in the same home for at least 5-7 years, the costs of purchasing it are more likely to be offset by accrued equity and increase housing value. Plus, you can refinance your home mortgage if more favorable rates become available.

2. Tax Deductions


When tax times rolls around, owning your own home has its benefits. You can deduct both mortgage interest, as well as your property taxes. Also, if you work from home you may be eligible to take deductions for a home office and portions of utilities. 

3. Freedom


When you own your own home, you have the freedom to do whatever you wish to it. You can hang as many photos on the walls as you want. You can paint the walls any colors that you want. You can even remodel an entire room, knocking down walls and installing new appliances. You don't have to ask your landlord's permission before making changes to your space.

4. Maintenance


Maintenance can be considered both a pro and a con when it comes to owning your own home. On the one hand, you have the freedom of fixing the issue yourself or hiring a family friend if you want. If you're renting, the landlord makes the decision on who fixes it and its on their terms. You may have to pay a monthly fee for maintenance work when you rent, but when you own your own home you have to pay for any and all maintenance issues that arise.

REASONS TO RENT


1. Flexibility 


Do you know where you want to live on a long-term basis? Renting allows you to "try out" an area before committing to it. Unless you are certain about where you want to live, you might want to take some time to research and discover the area.  Once you've experienced living there on a temporary basis, you can make a better decision about committing to homeownership there.

2. Uncertainty 


There's a lot of uncertainty in our world today. If you think you might need to move in the near future, maybe for career or other reasons, you might want to rent. Income changes can also affect your ability to borrow, as well as impact your ability to pay your mortgage payments. Buying ties you down both physically and financially. 

3. Utilities


In many cases, your landlord will include your utilities with your monthly rent. Water, sewer and garbage are most commonly included. However, some places even have deals where electricity, cable and internet are also provided in your monthly fees. When you own your own home, you have to pay for all those expenses, meaning you're responsible for getting those bills paid on time. 

As you can see, there are many pros and cons to both renting and buying. The decision on which is actually better completely depends on your personal situation and needs. If you're considering purchasing a home at the Lake of the Ozarks, give me a call at 573-746-7211. As your Lake of the Ozarks mortgage lender, I will run through the numbers with you and help you make the right decision about a new home purchase.

For Lake area news, resources and tips on financial services, please 


Michael Lasson
Sr. Residential Mortgage Lender
NMLS #: 493712

2265 Bagnell Dam Blvd, Suite B
PO Box 1449
Lake Ozark, MO 65049

Direct:  (573) 746-7211

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

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