To Buy or Not To Buy... That Is The Question

Home Ownership is not for everyone. This article will discuss 23 various benefits and negative aspects of owning a home.

Why you should consider buying a home now.

1. Historically, home ownership has been known to be a stable investment. Except for brief periods in history, real estate is a hedge against inflation. It is accepted that we are living in one of those times.

On the other hand, home prices in the U.S have risen 5% a year for the past 50+ years and that trend is likely to continue. During that same time, inflation was 4.5%. If you buy a home now, you've put your capital in a safe long term investment where it's likely to grow.

2. You'll pay fewer taxes and save money. You can deduct the interest you pay on your mortgage from your taxable income. New homeowners with new home loans tend to get the greatest tax benefit. The newer the mortgage, the higher the interest payment each month which means a bigger tax breaks. Real estate taxes are deductible providing great benefits to the homeowner. Some homeowners may find that owning a home costs substantially less than renting a comparable home.

3. Your home, your rules. As a homeowner, no one is in control of your home but you. This means you can sell your home when you want to.

4. Capital gains exclusion. As a homeowner, you can sell your residence and not pay taxes on the first $500,000 profit (if you are married) and $250,000 profit (if you are single).

5. The home will be yours. As your own landlord, you do not need permission to add a room or remodel your kitchen. Convert your garage into the ultimate man-cave and all you need is your spouses permission.

6. Cash flow positive with $0 down when buying a foreclosure. Right now most homes rent for more than the mortgage payment. Why? Because interest rates are lower than they have been in 40+ years. This is really rare. Usually to cash flow positive, you need to put a 20-30% down payment.

7. You'll have the peace of mind of owning your own home. With low interest rates, you will have a fixed, low monthly payment for the next 30 years. If you rent, your rent is almost guaranteed to increase over the next 30 years.

8. Mortgage payments are forced savings. A portion of your payment each month will go to the principal of the loan. Over time, you build equity because you are paying off the loan.

9.Owning your own home gives you and your family a sense of security, stability and pride of ownership.

10. Have as many pets as you want. Love your pets? Homeowners can relax and enjoy their pets without worrying about landlords!

11. it's a buyer's market. No need for you to settle for anything less than the house of your dreams. Right now, many sellers will pay for all of the buyers closing costs. This includes your first mortgage payment. Imagine getting a brand new home and not having to make a payment for up to 2 months.

12. Discounts on car insurance. As a homeowner, you can reduce your car insurance substantially.

13. Rebates and tax credits. Some states are still offering tax credits for both first time and move up home buyers. Active duty military can receive up to $18,000 in tax credits (deployment requirement). On top of that, any home buyer that gets a direct government insured mortgage from VA Home Loan Centers will receive $500 in cash rebate or closing costs credits.

Reasons why you may not want to buy a home right now.

1. Owning a home is a major responsibility. As a renter, you have no responsibility other than to pay rent on time.

2. While it is true that as a home owner you have the option of not conducting maintenance, it is advised to keep your property in orderly condition. Maintenance is a regular cost or duty of home ownership.

3. Liability. Having assets also means having liabilities. If you have nothing and you get sued, you have nothing to lose.

4. Mortgage payments are on your credit report. Pay late when you rent and you only have to pay a late fee. Pay late on a mortgage and you will have a bad mark on your credit report.

5. Property taxes and insurance. If you rent, these costs are the landlords problem. As a homeowner, your government insured mortgage will include the cost of property taxes and homeowners insurance.

6. Increase of debt ratio. Having a mortgage payment may increase your debt to income ratio. A debt to income ratio will not normally include a rent payment.

7. Not everyone is meant to be a home owner. Having unreliable income will cause added stress and uncertainty. This is even worse when you have a mortgage payment obligation.

8. Future value. The future is unknown. The value of real estate may increase or decrease over time.

9. Appliances will need to be replaced. When you own a home and you need a new appliance you may have to pay for replacement. The only prevention for this is if you have a home warranty. A home warranty can be extended for many many years but this is an added cost. When you are a tenant, you can call your landlord to bring a new dishwasher.

10. Termites. When you own real estate, you want to make sure that nothing will impact your investment. This includes termites. As a homeowner, to prevent termites, you may have to get a termite inspection every other year. Granted this is not very expensive, it is an additional cost.

When you objectivley examine both the reasons for and against buying, it makes it clear why home ownership is not for everyone. Purchasing a home is a big decision and not one to be taken too lightly.


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Philip D Georgiades II has been advising on real estate since 1993 and is the chief loan steward for VA Home Loan Centers. If you would like to claim your $500 loan rebate, or apply for a VA home loan visit: => Apply For VA FHA Home Loans