For most people who aren’t current homeowners, owning a home is a major goal. It’s often even referred to as a “dream.” A home is not truly “owned” by the buyer until it is paid for in full, either to a lending institution or when the home is initially purchased, but the freedoms of homeownership (decorating, remodeling, and even adding on as you please) still exist from the moment you take possession.
Many renters see home ownership as a near impossible, far-off dream. The idea of having to bear the responsibilities of homeownership are scary, and they feel they simply can’t afford the cost or get approved for a loan. These fears prevent many from even trying to obtain a loan when they may, in fact, get approved more easily than they expect.
In reality, purchasing a home is often not as impossible of a dream as it seems to some. I remember many years ago when my wife and I were attempting to sell or rent a house we were moving from. A potential renter came to meet me at the house, and after the initial greeting and some casual conversation I told her that she could either rent the house for the set fee or purchase it and pay quite a bit less if she could secure a loan. Naturally, I assumed she would reject the notion of buying and would still choose to rent. After all, renting is what she had always done and planned to do, and I knew many renters were intimidated by the thought of buying. To my surprise, though, she immediately responded by saying it would be foolish for her to rent the house and pay more when she could purchase it and save money. She went straight to a lender when she left, and before long the house was hers. My initial thought was that I should become a real estate agent since I had so easily convinced her to buy the house. I realized, though, that the credit really belonged with her for having the good sense to make a wise investment.
Buying a home is just that – an investment. And investments tend to pay off in the long-term much more than expenses that offer no reward. There are clear benefits to purchasing a home versus renting. When you buy, you will eventually own the home outright (provided you can keep up with the mortgage payments for the life of the loan), whereas you will always have a “house payment” if you rent. In reality, that rent payment is actually inflated because it is more than what the landlord’s actual cost of owning the home is. After all, the landlord is in the business of making money and can’t afford to lose money on the house. When you are buying your home, you can’t be evicted or have the house sold out from under you (again, provided you keep up with payments and the bank doesn’t foreclose on the property). A landlord selling the house, which may lead to unexpected circumstances, is a constant possibility when you rent. As a homeowner, you are free to make alterations to your house, whereas alterations to a rental require permission from the landlord, which are often denied. Likewise, you can never be forbidden from having pets as renters often are.
Renting does have its pros as well, though. When you own your home you are responsible for all repairs and maintenance, and the cost of those repairs can be quite high at times. When you rent, the landlord is responsible for handling and paying for repairs (although some landloards are far better at doing this in a timely and proper manner than others). If you don’t plan to stay in the area you’re in for long, renting may well be a wiser choice since you can leave the house much easier than if you owned and needed to sell the property. Selling a house in the first few years after buying it is typically not a profitable venture, so renting is often a better choice for short-term stays.
While owning and renting both have their pros and cons, owning is typically the far better option in terms of independence, financial security, and future reward. Home ownership is often not the impossible dream it seems to be to many people, and few people regret purchasing a home of their own instead of renting a home that really belongs to someone else.
If you do decide to look into purchasing your first home, be sure to obtain a reputable real estate agent to guide you through the process and a highly rated home inspector to thoroughly evaluate the home’s condition before you make such a big, long-term investment. There are several upfront costs when you buy a home, but they are necessary to ensure you are making a good investment and are a very minor expense in comparison to the overall cost of the actual home.
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