Pros & Cons of Owning A Home

The generation of baby boomers had a vision for successful homeownership. It began with buying a starter home, which was a small household for a small family.

As their careers and families grew they would move into bigger and better homes. Nowadays, plenty of Americans struggle with coming up with a down payment for their first home. They are torn between buying something now, or waiting and saving more money to buy a more long-term house. They may also buy a starter home and stay in it for quite a while.

At any level, it's a personal and financial choice we must make but let's take a look at the pros and cons before coming to a decision.

Pro: build stability faster

Homeownership teaches a person a lot of new things about life. You're exposed to making decisions you've never seen before. First time homeowners experience wave of accomplishment when they buy their first home they may feel a real sense of community and become more grounded. 

After changing a few things that make a new home their's, they will enjoy it by having friends over, and enjoying their own space.

Con: buying twice is moving twice

If you are planning on upgrading in a few years, you may be better served by saving your money for the larger house, so you can stay longer. 

Despite mortgage rates being historically low, there are still several hefty costs with buying and selling a home. There is title insurance brokerage commissions, loan fees, and inspections etc.

Moving is also quite expensive and exhausting; nobody likes to move. Some people are happy with one home for the rest of their lives, but it's not a bad model to follow if you plan on staying for the foreseeable future.

Pro: building equity

Getting in your first home almost certainly will provide equity, however it is not guaranteed. Typically, if you're staying a solid 5 to 7 years you will walk away with a proportionate amount of equity.

What's really cool is if you make improvements on your current home that add value, you can apply that money as down payment on your next home. In this light your starter home is propelling you to your dream home.

Con: spending more that you wanted

The soft costs with homeownership like furnishing your home, regular maintenance, and lawncare. This isn't including your property taxes and mortgage payments. 

Before moving in you'll already have visualized what color you paint the walls, what kind of floor you want in your living room. There will be bought lessons, count on it! You will hire a shotty repairman, make a bad landscaping decision, or wait to fix the roof. 

Homeownership is full of trial and error, the cost will add up.

Pro: knowing the tax benefits

When you own a home the interest you paid on your mortgage can be written off at the end of the year. So if you pay $1,000 a month in interest, you can write off $12,000 at the end of the year. When you pay your rent, that money goes to your landlord, never to be seen again. The faster you own a home in the faster you can save money.

Con: Home owning is not a sure thing

Our world is moving fast these days and home values are affected almost weekly. The last generation stayed closer to home, started a family earlier, and held onto the same job their entire life.

Today's world we stay single longer, and may purchase a starter home on our own. Our jobs take us all over the globe, and we like to be more mobile.

For some of us, this takes home ownership out of the conversation. So what happens when you buy a starter home, and a major life event happens like a job transfer, or unexpected divorce? Sometimes these situations don't leave you with a lot of room to get out ahead.

It's your choice

If you are determined to own a starter home, the sooner you can the better. It's never a bad plan to buy a home put in some sweat equity in, and stay several years. Rarely does this prove to be a poor move. 

Buying early can set you up to be in a nicer neighborhood later on with great schools and most importantly the home you want to be in.

Just remember homeownership is a choice and there is no correct path. Just stay with what you're comfortable with and believe in your intuition.

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