The pros and cons of renting vs. owning a home

When making the decision to buy or rent, there are many things to consider. Many of us have been renters our entire lives, but are ready to make the leap and become a homeowner

Before making the decision to invest in real estate, consider the following advantages and disadvantages to see what makes the most sense for you financially, as well as what works best with your current lifestyle.

The advantages of homeownership

Image: Flickr, KairosPhotography

Homeownership can be a wonderful, financially advantageous thing for many reasons, including those below:

• Paying a mortgage builds equity:
  We've all heard it before: Paying rent is a wasted expense that doesn't go toward building our financial wellness. Rent is a payment that goes to the homeowners in exchange for using their property as your home. We don't build any ownership in where we live, and when we stop paying rent, we move on to the next apartment as if nothing ever happenedWhen you buy a home, your mortgage payment is going toward principal and interest. Your down payment plus the amount of principal you have paid off in your mortgage equal how much ownership you have in your home

  Your ownership, also called equity, is an asset. This is something that is yours, and something that you have the right to sell. While the interest portion of your payment doesn't go toward increasing your ownership, your principal payments do. Monthly mortgage payments go toward purchasing your home. Read more...

More about Investment, Renting, Lifestyle, Home, and Supported