Pros and Cons of Home Ownership
The decision to buy a home in Kansas City or any other area is a big one and should not be made lightly. If you are planning to buy a home, you probably have good reasons in mind, ranging from the purely personal to the very practical. But home ownership is not for everyone. There are many good reasons for becoming a homeowner, provided you are ready for the increased responsibilities that come with it.
Advantages of Home Ownership in Kansas City
If you are planning to buy a Kansas City home, you probably have good reasons in mind. Some of the major advantages are described below.
A Place to Call Your Own
“Your home is your castle.” Perhaps you are ready to settle down in your community and want to have the feeling of permanence and involvement that comes with owning your own home. Maybe you need more space for your family. Or maybe you want more freedom than you currently have as a renter to change your home to suit your individual taste and needs.
Owning your own Kansas City real estate can offer a number of financial advantages, some of which are noted below.
When you are a homeowner, your monthly mortgage payments serve as a type of savings plan. Over time you will accumulate what lenders call “equity,” an ownership interest in your house you may be able to borrow against or convert to cash by selling the house. On the other hand, renters continually pay rent to a landlord for as long as they rent without the opportunity to build up equity.
Stable Housing Costs
While rents typically increase year after year, the principal and interest portion of most mortgage payments remains unchanged for the entire repayment period. Because of the effect of inflation, you pay the same amount with ever “cheaper” dollars.
Houses typically increase in value over time. It’s not unusual for a Kansas City house sold fifteen years ago to be valued at much more than its selling price today. This increased value (equity) is as good as money in the bank to the homeowner.
Homeowners are eligible for significant tax advantages not available to renters. Most important, the interest paid on your home mortgage usually is tax deductible and therefore can save you a substantial amount each year in federal income taxes.
Possible Drawbacks of Home Ownership
Owning a home requires a significant investment in time, energy, and money. You don’t want to over-extend yourself to the point you don’t have a penny to spare for anything else. Below are some possible drawbacks of home ownership for you to consider.
Usually you can expect to pay more for housing as a homeowner than you did as a renter, especially for the first few years. Even if your mortgage payments are less than your previous rent payments, as a homeowner you must also pay property taxes, homeowner’s insurance, all utilities, and upkeep expenses.
As a homeowner you cannot move as easily as a renter by simply giving the required notice to the landlord. If you anticipate moving to a new location within the next year or two, this might not be the ideal time to buy a house.
Repair and Maintenance
Don’t forget responsibilities such as mowing the lawn and taking care of needed repairs come along with home ownership. Actually, the promise of getting the advantages of home ownership without the accompanying repair and maintenance responsibilities is a major factor in the popularity of Kansas City condos.
Possibility of Foreclosure
If you fail to keep up your payments, the lender may sell the mortgaged property. This is called foreclosure and can result in the loss of not only your house but also your investment and good credit rating.
Ask T. J. Lamb, T.J. Lamb Real Estate, about applying for a mortgage in Kansas City area.