If you are considering purchasing a home, then there are many benefits to having an actual mortgage. While it is true that your monthly payment will be more than rent payments, the positive aspects of owning your own property far outweigh the costs. Here are five great reasons why having a mortgage is beneficial.
When you have a mortgage, you are actually making small payments to the bank or lender instead of paying rent to your landlord. Those payments add up over time and can help you eventually build equity in the home if it is your primary residence. Equity means that the money you owe on your home will be less than what the home is worth. You will have cash left over after the sale that you can keep for yourself when you sell it, which is a great way to make your money work for you. If you rent, there will be no equity in the property, and when it comes time to move, all of those monthly payments go right down the drain with nothing to show for them.
If you itemize your taxes (which many people now do) then you can get a deduction on the interest you pay on your mortgage, which means that you get back some of what you paid in a refund when it comes time to pay taxes. Also, when you sell your house and make money on it, you may have to pay capital gains taxes depending on how long you lived in the house. This is not the case if you rent. You are responsible for all of your expenses and get no deductions when renting, so in effect, this means that you will be paying more money because it’s taxed as income rather than as a deduction.
When you own your own home, you are not restricted to only making changes that the landlord or management company will let you make. If it’s your property, then you can paint the walls whatever color you’d like, tear down the ugly wallpaper border in the kitchen, or update the outdated flooring. You can make changes to your home whenever you choose because it’s your home and not a rental property that someone else uses to make money.
If you rent, there could be limitations on what you can and cannot do with your property. The landlord may not allow you to paint, or in some cases, they restrict the types of appliances or fixtures you can have inside your home. For example, if your rent includes having heat around the clock, it is unlikely that a landlord would approve an electric heater being installed even though this could be far more economical and energy-efficient. If the landlord does not allow any changes to be made, you are tied to your rental unit regardless of what happens until the lease is up. In addition, if you rent, there could be a possibility that your rental unit will not work out well for you in the long run, so it is best always to keep this in mind when entering into a rental agreement.
When you own your home, it is yours, and there’s nothing quite like the feeling of finally being able to say, “this is my house”. It is also very rewarding to know that all of those monthly payments were worth the inconvenience because now you have a place to raise your family or retire in peace.
In conclusion, with American Financing, having a mortgage is highly beneficial compared to renting because it provides you with the opportunity to build equity (which can become money in your pocket), receive tax deductions, and have freedom, control, and pride in your living environment.