There are many people that choose to own their own home and there are some that prefer not to. However, before making up your mind, then it is a good idea to make sure that you really think it through. Buying your own home can be a lifechanging decision and so it is something that needs a lot of careful thought. Most people will buy a home with a mortgage and this can be a huge part of home ownership and so it is well worth starting by thinking about the advantages and disadvantages of getting a mortgage.
Advantages of a Mortgage
- Most people will not be able to buy a home without getting a mortgage. These are a special type of loan which will allow people to be able to afford a home. They are great because they mean that people will be able to buy a home who normally would not because they would not be able to save up the lump sum of money, they would need to buy one. Even if they did try to save it could be really tricky because house prices generally keep rising which means that whenever you had saved enough you would find that it was not enough. Buying a home also means that you will be free of having to pay rent, although you will pay mortgage payments, this will only be for the term of the mortgage which is probably 25 years and then you will no longer need to pay anything.
- A mortgage can look good on your credit report. As can small loans if you repay them on time. This may seem odd but it is seen as a good type of debt and you have to make regular payments for it which can highlight to lenders that this is something you are capable of which will work in your favour. Of course, if you miss a repayment, then this will be a different matter and you will not be looked on favourably then.
Disadvantages of a Mortgage
- You will have to find a regular monthly payment for 25 years in order to pay the mortgage. This can feel like a big burden to some people. They may worry about how they will find the money to be able to do this. There will be all the normal household bills to pay as well and the maintenance of the property. Of course, you will no longer have rent to pay, but that may have been more expensive than the mortgage is anyway.
- You will have to pay for any repairs that are needed to the home. You may find that insurance will cover some of this, but it depends on your policy. You will also have the additional cost of the insurance policy as well.
- Some people do not like the idea of being in debt or having a loan. This is because they feel that it is a big responsibility or burden. It is worth trying to rationalise this as paying rent is also a responsibility and something that has to be paid if you want to keep living in that house.
It is good to look at these pros and cons alongside the other advantages and disadvantages of owning a home compared to renting and this should help you to make a decision. With a home of your own, you have stability and can make alternations and decorate and it will feel like yours. However, with a rental you have more freedom to move and do not have to pay for repairs to the home or redecoration even in some cases. For some people this might be a much more attractive option.