Buying A Home - Is Owning One Really Better Than Renting?

Do you believe renting a home is less expensive than owning

? Many renters suffer from the same belief, unsure which option is best for their particular circumstances. Many renters dream of owning a home, but they're reluctant to pursue this option fearing they'll never be able to afford it. Unfortunately, a hot real estate market with escalating property prices reinforces this pessimistic attitude.

Before you give up hope, here are some revealing facts you need to be aware of: After factoring in individual freedom, tax deductions, future rent increases, and the ability to build equity, you'll be surprised to learn home ownership is actually less expensive in the long term. When you take into consideration the thousands of dollars in potential equity that could be built, you can't afford to not buy a home.

When you own a home, you'll be able to deduct most of your monthly loan payments from your taxable income. Therefore, what you actually spend for a home may decrease-depending on your particular Federal, state, and local marginal income tax rate(MTR). The savings could amount to twenty to forty percent of the actual payment you make each month.

For example, let's assume your monthly mortgage payment (including principal, interest, property taxes, and insurance) is $2,000. After considering all tax deductions, your actual monthly payment will be around $1,400 a month. Your actual savings will vary depending on your particular situation. The point you should remember is don't assume home ownership is more costly than renting. You should consult with a loan agent and tax adviser to see if home ownership would be in your best interest. You may be surprised to discover how advantageous owning real estate is.

Besides the financial benefits, ownership provides a feeling of individual freedom. No longer would you have a landlord dictating how you can decorate, what guests are allowed, and whether you can have a pet. For any renters, the freemen of ownership justifies any financial sacrifices necessary to buy a home. When you compare the advantages and disadvantages of owning property, don't overlook the benefits of freedom and security home ownership can bring.

At first glance, the monthly cost of ownership may seem higher than renting. This may be especially true in areas of the country where the cost of real estate is hot. However, it's important to look at the big picture. The financial benefits of ownership is a long-term process and you can save thousands of dollars over time.

Another significant benefit to ownership is the ability to amass great wealth. Even though the real estate market is cyclical, homeowners tend to build greater wealth through home equity than renters.

by: Sarah P. Shimanski

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