Pros and cons of home ownership

PRO
A Place to Call Your Own Perhaps you are ready to settle down in your community and want to have the feeling of permanence and involvement that comes with owning your own home. Maybe you need more space for your family. Or maybe you want more freedom than you currently have as a renter to change your home to suit your individual taste and needs.


CON
Financial trouble from illness or loss of a job: When you own a home and fail to keep up with your mortgage payments, the mortgage lender could call the loan, which means payment in full or foreclose on the mortgage. This could result in the loss of your home as well as the equity you've built. A renter, on the other hand, can downsize to a cheaper apartment to cut expenses


PRO
Another interesting thing is when you own a home, your credit rating goes up a lot as well, thus you are able to get better loans at a lower interest rate.

CON
Your home loan needs to be paid on time and so is your home insurance. Therefore, it can take a toll on your financial commitments. So be sure to plan your home loan payments properly. Though there are various tax rebates and deductibles when owning a home, you still need to pay property tax each year.


PRO
Scheduled Savings When you are a homeowner, your monthly mortgage payments serve as a type of savings plan. Over time you will accumulate what lenders call "equity," an ownership interest in your house that you may be able to borrow against or convert to cash by selling the house. On the other hand, renters continually pay rent to a landlord for as long as they rent without the opportunity to build up equity.

CON
You are also liable for any damage that is caused to your neighbor´s property if the cause comes from you or your property. An example would be a fire breaking out from your home and spreading to your neighbor´s homes damaging their properties. In this instance, you are liable to pay for the damages caused.

PRO
Retirement Savings: Long-term home ownership can provide beneficial retirement security through the growth of equity.

CON
There are no guarantees: Even if you work hard at maintaining your home, property values can drop, depending on the neighborhood in which you live. This is why it's important to choose a house and neighborhood that have strengthening value in the real estate market.

PRO
Stable Housing Costs While rents typically increase year after year, the principal and interest portion of most mortgage payments remains unchanged for the entire repayment period. Because of the effect of inflation, you pay the same amount with ever "cheaper" dollars.

CON
Repair and Maintenance. Don't forget that responsibilities such as mowing the lawn and taking care of needed repairs come along with home ownership. Actually, the promise of getting the advantages of home ownership without the accompanying repair and maintenance responsibilities is a major factor in the popularity of condominiums. As an owner, you must pay for any unexpected costs such as a new roof or heating system. This is why a family budget and a savings strategy are important

PRO
Tax Benefits Homeowners are eligible for significant tax advantages that are not available to renters. Most important, the interest paid on your home mortgage usually is tax deductible and therefore can save you a substantial amount each year in federal income taxes. There may be tax deductions for improvements you do to the home. Check with your CPA or tax preparer as tax deductions change often.

CON
High Costs Usually you can expect to pay more for housing as a homeowner than you did as a renter, especially for the first few years. Even if your mortgage payments are less than your previous rent payments, as a homeowner you must also pay property taxes, homeowners insurance, all utilities, and upkeep expenses.

PRO
Increased Value Houses typically increase in value over time. It's not unusual for a house that sold fifteen years ago to be valued at much more than its selling price today. This increased value is as good as money in the bank to the homeowner.

CON
There are some disadvantages to owning a home. For example, you are liable for any accidents and injuries on your property. Getting a home insurance policy covering such cases can offset this. However, there is a cost involved.

PRO
Once an owner, always an owner: A first home often leads to a better second home. Owning and properly maintaining the property also offers a sense of accomplishment.


PRO
A home is yours forever. As long as you can afford the mortgage and taxes, you don't ever have to move. There's no landlord to terminate your lease, raise your rent or deny you permission to make changes to the property.

My bottom-line advice: Buying a home I believe is a good investment because it is yours. It forces you to save and build for your future. Sure you could rent cheaper but you live by somebody Else's rules. So when you buy don't over-invest in your home, either when you buy it or when you make subsequent improvements. Buy only as much house as you need. Plan to stay a long time. Don't view your home as your primary retirement savings. You home will bring you many memories, long term stability, and a sense of pride. Whether you own a home in Livingston County, Wayne County, Washtenaw County, Oakland County, or Macomb County it is a start towards your future. Search for Livonia houses for sale, Novi houses for sale or any Michigan homes for sale.
For more mortgage and real estate information go to my website www.russravary.com

I also have a great Michigan things to do section for lots of fun things to do in Michigan.

May life treat you and your family well this weekend.

Russ Ravary