To Buy or Not To Buy: Advantages and Disadvantages of Buying a New Home

by Kelly Richardson
Loan Page Columnist

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One of the biggest decisions you will make during your lifetime is whether or not to purchase a home. As with any major financial decision, you need to consider what taking on a mortgage could mean for you.

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It may seem like an old-fashioned idea, but making a list of pros and cons is a great way to decide whether or not buying a new home is for you. The American dream of owning a home is still at the top of most peoples' lists, but is owning your own home right for your financial situation? Taking careful consideration of your current needs and wants is the first step in making this decision.

Benefits of Taking on a Mortgage

Here are some of the advantages of taking on a home loan.

» Home Equity. A new home loan will allow you to build up equity in your home as your home gains value and you pay off mortgage principal over the years.
» Incentives. There are a variety of government programs and first-time home buyer deals that can help you to finance your purchase.
» On Your Own. Perhaps the biggest advantage to purchasing a home is that you have a place to call your own.

The Downside of a New Home Loan

As with any financial deal, taking on a new home loan also has its disadvantages. And the worst thing that you can do is to take out a mortgage on a new home and then discover that you made the wrong move. Take note of these potential issues.

» Down Payment. Many renters don't have the ability to raise the down payment needed for a mortgage.
» Upkeep. Owning a new home means taking care of the property and covering the costs of repairs.
» The Process. The process of obtaining a new home loan can be stressful and confusing without the right assistance.

Determine your needs and weigh your options. While owning a home may be a dream, it might not be right for your particular situation.

About the Author
Kelly Richardson covers the local education and technology scenes in major cities across the country. His articles appear in educational journals, periodicals, and e-zines.

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