Buying a Home

Owning a home has long been a part of the American dream. It's a goal that many Americans have already achieved. According to recent statistics from the U. S. Census Bureau, 67.8% of all households in the United States live in owner occupied housing.¹

Although the process of buying a home is often complex and confusing, it can be made more understandable by dividing it into several parts:

Renting vs. Home Ownership

There are advantages and disadvantages to both renting and buying a home:

Advantages Disadvantages Renting Mobility - renter can move without having to worry about selling the home or the home's market value at the time of sale. Initial cost - No need for large down payment. Monthly cost - Monthly rent usually less than mortgasge payment; in some areas rents are controlled; other opportunites .may provide greater investment return. Maintenance - Few or no maintenance responsibilties. Monthly cost - rents can increase over time. Equity - Renter builds no equity in home. Space - Often less floor space. Personalization - Less freedom to decorate the home. Taxes2 - No deduction for rent payments. Buying Monthly cost - With a fixed rate mortgage, monthly payments remain level; with a variable rate mortgage, monthly payments can increase or decrease. Equity - Homeowner can build substantial equity over time. Space - Typically larger floor space than with a rented home. Personalization - can usually decorate to make home reflect owner's tastes. Taxes2 -Interest and property taxes are usually deductible. Mobility -Ownership limits ability to move; homeowner must be concerned with selling the home aswell as the home's market value at time of sale. Initial cost - Substantial cash usually needed for down payment and closing costs. Monthly cost - Monthly mortgage payment typically higher than monthly rent; other opportunities may provide greater investment return. Maintenance - Homeowner is usually responsible for all maintenance and repairs.