6 Benefits of Going From Renter to Homeowner

If you’ve been renting, you’ll see lots of changes when you become a homeowner. While you will be responsible for new expenses like repairs, maintenance, taxes, and insurance, the benefits of homeownership still outweigh those of renting. Here are six benefits you’ll see when you go from renter to homeowner.

  1. Decrease Your Cost of Living

As expensive as rent is these days, a mortgage payment may cost you less every month. You can figure your potential mortgage payment with a mortgage calculator. In addition, rent tends to go up every year, while a fixed mortgage payment stays the same.

  1. You’re Free To Make Changes as You Wish

There’s big freedom in owning a home that you don’t have when you rent. Paint the walls, change the carpet, add a deck, close in a carport, plant new trees and bushes, and make other changes. After all, you own it!  Homeowners make these decisions for themselves without having to check with the landlord. (Just make sure you understand the rules before buying in a deed-restricted community.)

  1. You Build Equity

Once you pay rent, that money’s gone. Mortgage payments, however, help to create equity in your home over time. (Equity is the dollar difference between the home’s value and the mortgage loan balance). You can continue building equity, sell the house and use the equity to buy another property, or cash out your equity with a home equity line of credit (HELOC) or cash-out refinance.

  1. You Receive Tax Deductions

When you rent, there aren’t any deductions available from your living expenses. Mortgage loans allow you to deduct things like your property taxes and mortgage interest off your taxes. These deductions can add up to thousands of dollars, which can save you big at tax time.

  1. You Build Your Credit

Landlords don’t usually report their tenants’ payment history to the credit bureaus, so renting doesn’t help your credit history or increase your score. When you buy a home, you’ll pay monthly mortgage payments on the loan. These payments will be reported to the bureaus. Your consistent, on-time mortgage payments will rack up positive payment history, which helps increase your credit score.

  1. You Feel More Settled

When you rent a place, you may feel unsettled, like you aren’t part of the community. Buying a house changes this perception. Being a homeowner allows you to put down roots and feel like you have a permanent place to call home.

Renting may seem like an easy way to live on the front end, since you aren’t responsible for repairs, yard work or maintenance. Look deeper, however, and the benefits of homeownership will be clear. Being able to put down roots and adapt your living space to your personal style and taste are big pluses. Add to that you’ll be building equity and enjoying significant tax deductions, and homeownership is the winning choice.