CHAPTER 1 Own or Rent
“You don’t buy a house based on the price of the house. You buy it based on the monthly payment that’s going to be principal and interest and insurance and property taxes.” – Diana Olick The decision to own or rent a home is one of the most significant financial choices an individual or family can make. Both options come with advantages and disadvantages, and the right choice depends on a variety of factors including financial stability, lifestyle, and long-term goals. Financial Considerations One of the primary factors that influence the choice between owning and renting is the financial aspect. Owning: • Creates Equity: When you own a home, you are building equity over time as you pay down the principal on your mortgage. This means that you are essentially investing in an asset that can appreciate in value, potentially leading to long-term financial gain. • Tax Benefits: Homeowners often enjoy tax advantages, such as deductions on mortgage interest and property taxes, which can lower their overall tax liability. • Stability in Costs: With a fixed-rate mortgage, your base monthly mortgage costs remain stable over the term of the loan, providing predictability in budgeting. However, the cost of homeowner's insurance and property taxes typically increase. Renting: 1
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