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If you are thinking about buying your own home, there are many things to consider:

Advantages

For many people, owning a home provides the satisfaction of having a place that they can call their own—a place to put down roots.

There are other advantages to homeownership:

• When you own your own home, you may feel more a part of your community and your neighborhood.
• Homeownership offers more flexibility than renting if you want to make changes to your living space, such as painting your walls or adding carpeting.
• Homeownership can be a way to build wealth and achieve financial security. Over time, your home may increase in value, which may increase your net worth. As your home appreciates in value, you build equity in your home. Equity is the amount of financial interest you have in the property after your existing mortgage debt is subtracted from the property's current fair market value.
• The interest you pay on your home mortgage is often tax-deductible.

With the many advantages of homeownership come additional responsibilities that may not apply to renters:

• You are responsible for maintaining your home and fixing any problems that may arise. Upkeep on a house can be time consuming and costly.
• You are responsible for paying all utilities such as heating, electric, water, and sewer services.
• You may need to purchase household items such as major appliances and lawn equipment.
• You are responsible for insuring your home against property damage.
• You are responsible for paying local property tax on your home.

Unlike rent payments, a portion of your monthly mortgage payments may be tax deductible, which may result in a lower annual tax payment or a tax refund.

If you own a home, you may be able to deduct the annual interest you pay on your mortgage loan and some of the upfront financing costs of the home, such as points. Your annual property taxes may be deductible as well.

If you are currently renting, you should consult your tax advisor for more information about the tax consequences of homeownership.

A lender determines how much equity you have in your home by taking the appraised value of the home and subtracting any remaining mortgage debt. For example, if your house is valued at $100,000 and your mortgage balance is $60,000, you have $40,000 equity in your home.

If your home retains its value or increases in value over time, your monthly mortgage payment can be a way of building savings. As your home equity increases, so does the amount of cash you may receive if you decide to sell your home in the future.

If you have built up sufficient home equity, you can also borrow funds against it. You can take out a home improvement loan to make repairs or remodel your home. Or you can take out a home equity loan for other purposes, such as paying for emergency repairs, health costs, or educational expenses.