When deciding whether or not to buy a home for the first time, it is essential to compare the benefits of buying versus renting.
Renting provides the liberty to move when the lease expires rather than having to wait until you sell your home. Renting allows you to avoid the cost of maintaining the property and requires less cash up front; however, homeowners have the freedom to remodel as they choose. Also, renting throws away money that could be building equity. When you own your home, your monthly mortgage payment not only pays for you to live in the house but is also an investment.
Although you generally invest 5% – 20% percent of your own money and 80% – 95% of the bank’s money, you receive the benefit of 100% of the house appreciating each year.
When you sell your house, you receive money that you would not have received when you are renting. Plus, you can deduct items on your taxes, including interest on your mortgage and property taxes. Provided that you choose a fixed rate mortgage, you lock in a consistent payment, while renters should expect a few rent increases over the years.