To rent, or to buy?

That is the big question, isn't it? The decision to buy a home can be a tough one. In fact, it's one of the biggest decisions you'll ever make in your life. It's helpful to understand the benefits of buying versus renting so you can make an informed decision.

Just remember - renting and buying aren't fundamentally good or bad. What matters most is doing what's best for you and your future.

Comparing the Pros and Cons

Buying

Renting

Pros

Pros

An investment - you build equity No long-term commitment
Potential tax breaks No maintenance costs
Freedom to customize your space Renter's insurance is cheaper than homeowner's
More stable housing costs No property taxes

Cons

Cons

Long-term commitment Builds equity for someone else
Requires taxes and maintenance costs No tax benefits
Requires down payment* Little freedom to customize your space

* Depending on loan program. Down payment implies an opportunity cost, or the potential financial benefits you could have achieved through an alternative investment path.

Building Equity

Buying a home is an investment. As you make monthly payments on your mortgage, you build equity.   

Equity is the current market value of your home minus the amount you owe on your mortgage. In other words, it's the portion of your home that you actually own.

For example, let's say your home is worth $250,000, and you currently owe $180,000 on your mortgage. That means you have $70,000 of equity. As you pay down your mortgage, your equity will continue to increase. And, as the market value of your home increases, so will your equity. This allows your money to grow by doing nothing more than caring for your home. This money can be used to borrow against in the future or to turn a profit when you decide to sell. 

Questions?

There's a lot to think about. Our experienced Mortgage Bankers can help you decide if buying a home is right for you. Let's talk!

Homeowner Tax Breaks

Mortgage Interest Deduction

The interest you pay on your mortgage is tax deductible for any home loan up to $1 million dollars. Interest makes up most of your mortgage payments early on, so this is a helpful tax perk for new homeowners.

Mortgage Insurance

If you purchase a home with less than 20% down and have to pay mortgage insurance, you can deduct those payments on your taxes as long as your adjusted gross income (AGI) is less than $109,000.

Sales and Real Estate Taxes

The sales tax you pay when you buy your home is also tax deductible. This is especially helpful if you live in a state without income tax or if your home's sales tax costs more than your income tax.

And, as long as your home is your primary residence, your real estate taxes (or property taxes) are tax deductible, too.

Whatever You Decide, We're Here For You

You can expect personal and attentive service from our Mortgage Bankers, who will guide you through each step of the process.

We offer a variety of loan programs, including conventional home loans, jumbo home loans, and our Lock and Build Program for clients who want to build a new home.

Ready to get started?

Fill out the form or apply online and a Mortgage Banker will contact you. For questions, call us at (800) 947-7061, Monday - Friday from 7am to 6pm CST.

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