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The Pros and Cons of Buying a Home
By Joe Taylor Jr.
CMR Columnist
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Disadvantages of buying a home:
- Mortgage interest rates can fluctuate. If you're buying a home for the first time, you may be tempted by an interest-only mortgage. While an ARM lets you move into a home with little money down, your mortgage interest rate fluctuates with the market. Instead of a fixed monthly expense, you could be riding a budget rollercoaster.
- You may be stuck with a mortgage if you have to move. If you have to move on short notice, for work or for family reasons, you will probably want to put your house on the market. Unless you live in a hot housing region, you could wind up making mortgage payments for a home you're not living in.
- Lower mortgage interest rates require larger down payments. Finding lower mortgage interest rates is the key to saving money over time. If you have bad credit, you can only qualify for the best mortgage interest rates by paying more money up front as a combination of down payment and financing points.
Advantages of buying a home:
- Even with bad credit, you can usually find a mortgage. You may have to pay a slightly higher mortgage interest rate, but mortgage lenders are much more lenient than most landlords.
- Mortgage refinancing can help you redecorate or repair. While renters have to tolerate the interior design whims of their landlords, mortgage holders can decorate their homes any way they want. Refinancing your mortgage lets you "cash out" the budget for your home repairs or upgrades.
- You can write off taxes, while building equity. Borrowers enjoy a healthy tax deduction that actually gets larger as mortgage interest rates climb. At the same time, homeowners paying principal on their mortgages build equity that they can use for home repairs or to eliminate bad credit.
Sources
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About the Author
Joe Taylor Jr. coaches musicians, entrepreneurs, and other adults that want to shift their careers. He holds a Bachelor of Science in Communications from Ithaca College.
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