Purchasing your first home is a big decision, and a little knowledge about the process can go a long way in preparing you for the journey. Owning a home is a big responsibility, but it can be very rewarding as well. There are several advantages and disadvantages of home ownership, and today we'll be examining a few of each.

Owning a home comes with several advantages, such as the freedom to personalize your space and the ability to grow your investment. Here are a few additional benefits.

A Place to Call Your Own
Maybe you’re ready to settle down in a specific community, need more space for your family to grow, or want the freedom to build the home you’ve always envisioned. Whatever your reason, owning a home provides you the opportunity to leave your mark, and truly own your space.

Investment
When you are a renter, the money you pay each month builds value and equity for a landlord or property management company. When you own your own home, however, that money helps to build your property’s value and equity instead. With a typical home loan, your home’s value increases as your principal (amount owed) decreases. Owning a home is an investment in your financial future.

Cost of Housing
While rent can increase year over year, the principal and interest of a fixed-rate mortgage payment remains unchanged for the entire payment term. This means that as your income increases, your mortgage payments are likely to become more affordable.

Tax Benefits
Rent is generally not tax-deductible, but mortgage interest may be. Mortgage interest refers to the portion of your payment each month that you pay to the lender for using their money. Homeowners are usually eligible for significant tax advantages that aren’t available to renters. It’s important to talk to your tax advisor about any tax advantages you may be eligible for as a homeowner.

Homeownership can bring a few drawbacks as well that are worth considering. From large upfront costs to being mindful of the cost to preserve your property and investment, it’s vital to remain mindful of the risks to owning a home.

Maintenance
Unlike renting, if anything goes wrong on your property, repair and upkeep of the property are your responsibility as a homeowner. If one of your kitchen appliances or a hot water heater go out, you’re the one who must fix it or hire someone to do so. It’s important to keep the cost of maintenance in mind when preparing to purchase a home.

Foreclosure
In the event that you are unable to make your monthly payment, you can risk losing your home.

Market Value
The market value, which is what your home is worth based on market conditions, means that your home can gain or lose value over time.

Having more knowledge about the process can help you get one step closer to realizing your dreams of homeownership. If you have explored the benefits of owning a home and are ready to embark on your own homebuying journey, our Mortgage team is always ready to assist.

This article is for general information only and not intended to provide specific advice or recommendations for any individual.