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by Alfonso Salazar
on Monday, April 21st, 2014 at 9:33am.
There are many people that believe that renting is easier than home ownership, or that owning a home will cost much more than renting. There are many things to look at when deciding what is best for your family. Here are some tips to help you make that decision:
Tip One: Look at the overall cost vs. benefit argument.
It is true that renting can make more financial sense in the short run, but the long-range view is much different. Over time your rent will rise, sometimes each year going up a little more. If you purchase a home with a fixed-rate mortgage, your monthly payment of principle and interest will stay the same.
Tip Two: Consider the power of leverage:
When you buy a home, you have the ability to magnify the purchase power of your money through leverage. When you buy a home, more times than not, you use some of your own money in conjunction with a long-term mortgage. Using that borrowed money, you are able to profit from price increases on property you haven't paid for yet.
Tip Three: Consider appreciation of your investment:
Your home may be worth more when you sell it than when you bought it. This is called appreciation. You can utilize that money to help purchase your next home or use that equity to pay other bills, go on vacation or as a source for retirement.
Tip Four: Consider tax breaks:
There are many ways you can utilize your home ownership to help with your taxes. You can deduct mortgage interest and property taxes to help with your taxes each year.
Tip Five: Consider risk in the decline in value:
The value of homes can go up and down. If you find a home during a time when values are down, when the market goes back up. you have instant equity.
Tip Six: Consider the stability
When you own a home, you can not as easily pack and move. This can give your family stability as your children grow up with friends through school and sports.