We’re taught from a young age that buying a house is part of truly living the “American Dream.” But with rising interest rates and limited inventory, you may be wondering if it’s something to dream of attaining after all. So, is homeownership really worth it? Well, it depends. Here are three reasons for and against.
Why homeownership is worth it
1. You’ll build wealth
No matter where you choose to live, you are putting money into your home. But when you purchase a property, that money is eventually going back into your own pocket. When you purchase a house you gain equity, which can help you to gain wealth in the long-run. (Most homes increase in value over time.)
2. Your monthly payment won’t significantly change
While rent continues to increase year over year, you could have your mortgage payment set to stretch anywhere from 15 to 30 years. This means that aside from your taxes and insurance, your payments won’t likely change too much. In some cases, they may even decrease. Essentially, you can have a fixed housing cost.
3. You’ll have more privacy and peace of mind
A really big reason why people desire to buy a home is because they find that it brings them greater privacy and peace of mind. This can be especially true when it comes to children and pets. You can maintain the same school district for your kids and enjoy a big backyard for your furry family members. Buying certainly can help you to put roots down.
Additionally, when you choose to retire, if your mortgage is paid off – or almost paid off – you no longer have to worry about a housing payment which can make a big difference when you’re earning power is lower and inflation continues. Not to mention, you can always choose to downsize and sell your home, turning a profit.
Why homeownership is not worth it
1. Saving up for a down-payment can prove cost-prohibitive
Sure, it’s great to gain equity in a home and pay the same if not less monthly, but if you don’t have the money at all or if you need it for other pressing things, it’s a moot point. Whether you’re putting down 3% or 20%, it’ll still likely be significantly more than a month’s rent.
2. If you move you could actually lose money
When you rent you have the ability to pick up and move as soon as your lease is up (or even sooner if you’re allowed to sub-lease it). But when you own a home, you lose that freedom. In order to turn a profit, most people have to stay in a home for three to seven years. Depending on whether you have refinanced your mortgage to care for other financial matters, it may require you to stay put even longer.
3. You’re responsible for a lot, financially
Most people fail to think of all of the things you’re responsible for once your purchase a home. Put simply, anything that requires fixing or maintenance in your home is your responsibility. Whether the roof is leaking or the washing machine breaks, you must handle it yourself. This can take quite a toll on any savings.
Palumbo Law Helps Those in Rhode Island with their Property Insurance Claims
If you own a home and it suffers property damage, you’re on the hook to deal with it. But luckily, a qualified property insurance attorney can help.
At Palumbo Law, our experienced Rhode Island Property Insurance lawyers work strategically to help our clients to get what they deserve. We have deep experience working with insurance companies and understand how to deal with them. If you plan on filing a claim or have done so and been denied, we can help. To learn more or to schedule a free consultation, call us today!