Maybe you’re about to close on your first house and you’ve suddenly got cold feet. Maybe you’ve been a homeowner for a while, but you’re starting to wonder if you wouldn’t be happier as a renter. It’s normal to feel doubt about your decision to buy and stay in one place for a while, but you should think through some of the benefits of home ownership before you do anything drastic. Even if you do decide it’s not for you right now, you can always be a homeowner in the future.
There’s an emotional satisfaction about a place that’s all yours, especially if you have always been a renter up to now. You can paint the walls any color you like. You can get two dogs or four cats, and you don’t have to ask permission. No one is going to raise your rent or tell you that you have to leave or otherwise impose less than ideal restrictions on your residence. Do you hate the bathroom tile? Are you dying to add an extra room? You can do it all, with local zoning laws and your own budget as your only limits.
Access to Equity
Buying a house can be a great financial move for a number of reasons. After you’ve owned it for a while, you can take out a home equity line of credit. This can allow you to do many things, including paying off other debts, remodeling or taking a trip. It does reduce the equity you have in your home if you use it, but a HELOC can be something that you have in case of emergencies. You can review a guide that will better explain your options along with providing information about tax treatments and interest rates.
When you buy a house, there is not a guarantee that its value will increase. This is the case with most kinds of investments.
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However, houses usually do not decrease in value, and even if they dip some, over the long term, the pattern is usually one of an overall rise. This can eventually be a valuable asset for you. Keep in mind as well that if you need to move, you can always use it to generate income as a rental property.
Other Financial Considerations
There are tax benefits to buying a home and benefits for paying off your mortgage over a period of a decade or more. Imagine if every month when you paid your rent, that money went into a long-term savings account for your benefit. This is essentially what is happening as you pay off your mortgage. Being a homeowner can also increase your credit score. In addition, you’re no longer at a landlord’s mercy when it comes to things that will lower your expenses over the long run, such as good insulation and energy-efficient appliances. If you have a fixed-rate mortgage, your payments will remain predictable, allowing you to budget more effectively and make long-term plans about what to do with your money.