There is a lot that can be said for the pro and cons of Home Ownership. In everything that we do in life, there always seems to be a good side and a bad side and the side that we don't see until it's upon us and too late.
Each individual must take the facts for each side and weigh them according to their own lives goals. What may be a pro for one individual can easily be a con for someone else. Let's take a look a closer look at the aspects of Home Ownership.
When choosing a home in today's market, be careful not to fall in love with a house that you can't afford. Taking that into account and the fact that home prices have been falling, with careful searching you can find a great deal out there. Also, people take pride in owning their own home and, therefore, tend to take care of them especially if they plan on living there for a long time. This a the plus side. The negative side is that, although at one time real estate was almost always a good investment, today's market gives no guarantees. Even though it is a major investment, it should not be looked at as a way to make money today. Compare it to purchasing a new car. You are tired of your used car breaking down so you make the decision to purchase a new car all the time knowing that the value goes down each year. Buy a home because you want to or need to, not because it's going to be your atm machine in years to come. Besides, no one can say how many years down the road that can be and paying your mortgage off thus having no mortgage will always be the better way to go.
Taking out a 30 year or more mortgage will most likely give you an advantage on your income tax returns. If you itemize deductions and do a Schedule A , you can deduct the mortgage interest and real estate taxes. But beware that if you have a lot of exemptions which in turn increases the standard deduction, you can basically wipe out this benefit. In other words, if your standard deduction is higher than your Schedule A total, you are no longer receiving this tax benefit. This happens more often with 15 year and 10 year mortgages because the less years left on a mortgage means the less interest you are paying. Most of the interest is paid during the first 10 years of a mortgage. Besides, in reality, the income tax advantage is only pennies on the dollar as compared to getting your mortgage paid off.
Maintenance and repair are factors to consider. Someone gets ill or becomes unemployed. These are possible realities to consider when making the decision to pursue home ownership. Some of these can be very costly. It is important to make sure that you have some savings set aside for those unexpected happenings. If you are just getting by right now as a renter, it may be good idea to hold off purchasing a home. Instead, set up a savings plan and live by it until you are comfortable. This will help you to have some extra money when you do purchase your home. Hopefully and more importantly, you will be comfortable with your savings plan and will continue to do so after your purchase so that you are ready for that rainy day.