Mortgage LoansFirst Time Home Buyers
Typically, people think of monthly rent payments as being lower than monthly mortgage payments. But today, with home prices down dramatically, it’s not as clear-cut a financial picture as it may once have been.
Of course, homes come with tax advantages.* These include the deductions for mortgage interest, local property taxes and home equity interest (if you borrow against your home), plus savings on capital gains taxes if you sell. On the other hand, if your rent payment is lower than a mortgage payment, you can put those extra funds into an investment and potentially earn interest. Rent often includes at least some portion of utility costs, too, as well as general maintenance and repair expenses. Those are all costs you’ll foot yourself if you own a home, increasing your monthly payout.
Lifestyle Considerations
There’s more to think about than just finances. For instance, how long do you plan to live in the area? If you relocate often for your job, have just moved into an area or are in the midst of a life change that lends itself to a temporary residence, then renting may be a simpler, easier option than buying (and perhaps having to quickly sell) a house. If you’ve found a neighborhood you love and are expecting to stay put for at least two years (some experts say five), then a home of your own begins to make sense. As a homeowner, you’ll also need to factor in time for home and yard upkeep — or the money to hire someone else to do those chores. Of course, for some people, part of the joy of homeownership is having a yard to landscape and an interior to decorate without worrying you’ll lose your security deposit.
Emotional Impact
Last but not least, don’t overlook your gut feelings about renting versus owning. Do you get anxious about commitment? Renting may suit your personality best. If you love stability and the sense of achievement that often comes with owning your own place, then buying may be the right fit. Whichever choice makes sense for you, rest assured that First National Bank North Platte is there for you. If you’re ready to buy, we have home loans to fit a variety of needs.
*For more information regarding potential tax advantages of home ownership, you should consult your personal tax advisor.
