They say home ownership is the American dream. Do you desire to own your own home? Or maybe you are content with renting and less responsibility for maintenance? As long as you plan to stay in the same area for an extended period of time, owning makes a lot more sense than renting. Here are the top 4 reasons why paying a mortgage is better than paying rent.
1) Control- Your place, your rules. Within reason, of course. Want to get a new family pet? Go for it! Want to landscape your yard, put in a pool, add on another bedroom, or remodel your kitchen? These are some things that are out of the question in virtually any rental situation and can be as easy as applying for a building permit if you own your own home.
2) Pets- Renting with pets can be extremely difficult, especially with certain dog breeds that are commonly banned. While condos may still be restrictive, single family homes usually have the least amount of restrictions. It is important to check with the local municipality for rules on domestic pets. If there is any kind of a Home Owners Association, be sure to check for any additional rules.
3) Build Credit- There is no better way to build strong credit than to have a monthly mortgage and pay it on time. Most landlords do not report to credit bureaus, thus not building your credit, although they have the right to report if they want to.
4) Investment- Home ownership over the long term is the way most people build wealth. Paying down your mortgage builds equity (the difference between your home's market value and how much you owe on your loan). While owning your home typically only provides 3%-5% annual returns on a long-term basis, this is still far better than paying out hundreds of thousands of dollars and not building any equity whatsoever. Home ownership is the way to go!
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