Benefits of buying a home instead of renting
You’re not the only one who feels stuck contemplating whether you should buy or rent your next home. Many individuals have trouble deciding what the smarter financial decision is. But don’t worry, you’re not alone. We’re here to explain all of the benefits of buying a home versus renting one. And by the end of this post, you should feel confident and well-informed about buying your next home.
Here’s why you should buy a home instead of renting one.
Interest rates are still considerably low.
Interest rates are still considerably low, with a 30-year-fixed-rate home loan remaining at around 3.5%.
Rent prices are on continuous rise.
In most metropolitan areas, rent prices are equal to that of a monthly mortgage payment, if not more. In Florida, rents are up 3.9% over last year. St. Petersburg is the 6th most expensive city to rent with a median rent of $1,300 for a 2-bedroom. Tampa placed 7th on the list with a median rent of $1,170 for a 2-bedroom. In fact, Tampa rents have increased 8.6% over the past year alone.
Home Prices Are Stabilizing
Today, buyers have the advantage to bargain with sellers, even in some of the most competitive markets.
Smaller Down Payments
There are numerous programs out there to help assist you in buying a home. The City of St. Petersburg offers a home ownership assistance loan which is based on the purchase price of the home, the first mortgage loan amount and the cost of closing the purchase transaction.
The City of Tampa also has a mortgage assistance program which offers down payment assistance loans to income eligible home buyers of property within the City limits of Tampa. The loan is in second position behind the primary financing from a mortgage lender and is usually known as the “silent second: because of the 0% rate and $0 monthly payment.
Whatever your case may be, you should look into the many different options which can help assist you with lowering your down payment.
Big Tax Reductions
If you’re a new homeowner, a house is an asset which can lower your tax liability and you should be aware of the housing tax deductions and credits that can save you thousands. It might take a little bit more work upfront in order to claim these benefits however the benefits and savings can make the effort well worth it.
Here are some of the tax breaks that can keep a considerable amount of money in your wallets.
Mortgage Payment Interest Deduction
This is the biggest tax break after buying a home. This deduction covers interest paid on up to a million worth of loans and is super beneficial to new homebuyers with new mortgages, considering they pay more interest. This is definitely worth looking into.
Mortgage Credit Certification
This program is another great way for first time homebuyers to receive a tax break on their mortgage interest and is intended to help lower-income individuals be able to afford home ownership. This is different from a deduction which reduces your taxable income and credits directly against your tax bill, lowering what you owe.
Mortgage Points Deduction
Mortgage points are prepaid interest that also qualifies the borrower for a lower interest rate over the life of a loan and since it’s still a payment against the interest, it qualifies for deductions.
Buying a home allows you to build equity with every mortgage payment. If you’re planning on staying in your home longer than a few years, buying a home is cheaper than renting one.
Many people also choose to buy a home because they are able to have more privacy and freedom. Homeowners are able to do what they want on their home without worrying about any restrictions.
Owning your own home gives you the ability to do with it as you please. For many people, it’s very rewarding and gives homeowners a sense of pride and achievement. It also forces you to save which can pay off in the long run. In addition, you’re also free to do whatever you want to it. You can paint, plant a garden, remodel it or add high end upgrades. The options are endless when you own your own home.