Atlantic Blog

Are you better off buying or renting? If you are having this debate with yourself or a partner, then let me add a few points to the discussion.

I think there are definite advantages to buying a house. The number one advantage is that, over time, you build equity. Every dollar paid toward a mortgage principle represents equity. When you pay your mortgage, you are paying yourself. Tax benefits are another huge advantage. As a homeowner, you can deduct your property taxes and interest paid on your mortgage, reducing your overall taxes. Plus, don’t forget the Maine Homestead Exemption, a chance to lower your property tax bill. You qualify if you have owned your own home in Maine for 12 months.  Although it is important to remember, while home ownership builds equity over time, home values can still decrease or remain flat. 

The number one advantage of renting? No responsibility for maintenance or repairs. This is also one of the disadvantages of being a homeowner. Unexpected issues, like the water heater, suddenly seizing up can be an unwanted financial surprise. 

The other advantages of renting could be that some utility costs are included and credit requirements are less strict. Many landlords will rent to you even if your credit score is low.

A credit score is important when applying for a mortgage. You should know your score ahead of time. Be sure to check it for errors. Be sure to discuss credit with your partner in advance. When you apply together both credit scores will be taken into consideration. If you need to improve your credit score, then it is best to take action before applying for a mortgage. You could apply for a mortgage using the better credit score, but it might mean you qualify for a smaller loan. Your lender can work with you to determine the best approach to meet your goals.

When buying a home there will be the upfront costs:

• Down payment
• Closing costs (title search, appraisal fee, loan origination fee, and more)
• Prepayment of taxes, interest, insurance 

For first time home buyers there are options to get into a home with minimal upfront costs. If you find yourself wondering, “How much mortgage can I afford?”, then our mortgage calculator can be an excellent resource as you look to uncover the financial realities of home ownership.

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