Renter disadvantage: With renting, property owners are known to increase the amount of monthly rent and other expenses you must pay annually, and sometimes randomly, without much notice. You don’t have control over this. 4. Tax advantages of homeownership. As a homeowner, you qualify for major tax benefits when you buy a house, both at the time of purchase and for the duration that you own the home. Homestead exemption is one example; many states exempt all owner-occupied homes (“homesteads”) from a portion of the property tax that would normally accrue over time. Further, homeownership entitles you to certain federal tax deductions, such as claiming your property taxes and mortgage interest paid, offsetting your annual income tax burden. You can also claim any mortgage discount points on the loan; these points are equal to 1% of your mortgage and involve prepaid interest. They are tax deductible and can reduce your total mortgage payment. Renter disadvantage: If you rent your home, you might be able to claim the rent you paid for the year on your income tax, but the tax benefits end there. Renters aren’t eligible for housing-related federal tax credits or deductions. 5. Lower mortgage rates. Currently, in today’s market, interest rates have fallen and are on the lower side, making it easier to purchase and own your own home than it was years ago. Bear in mind that interest rates are variable and rise and fall, so as part of your home-search process and getting approved for a mortgage, keep an eye out for low rates and try to lock that in with a fixed rate. Renter disadvantage: With renting, landlords set the price, which often increase annually. You don’t have the option of locking in a fixed rate for the duration of your mortgage. In fact, in many states, average mortgage monthly payments can be lower than
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