Your career, your first car, marriage and children: Whatever you view as key life milestones, buying your first home certainly qualifies as one. Buying can be a sound financial decision, with immediate and long-term advantages over renting. Buying a home is a big decision – perhaps one of the biggest in your life. Your first house can be a place you call home for years to come, and it’s a long-term investment of your time and finances. That’s why it’s important to weigh all of the aspects of homeownership in advance.

Here are some factors to consider before beginning your homebuying process.

Control Your Comfort

Buying your own home puts you in control, allowing you to customize your personal living space.
First-time homebuyers enjoy the luxury of identifying their needs and filling their home with what they want. From interior décor to exterior paint, you choose what goes into – and onto – your home.

Location, Location, Location

Buying a home isn’t just about location – it’s about people, too. Shopping for your first home is the ideal time to identify the community you’d like to be a part of, and then join it. Entering into a community you enjoy offers long-term benefits for you and your loved ones.

Leverage Your Assets for the Future

Owning a home increases your assets, which can open up opportunities for other investments. Once you’re a homeowner, you may be able to use your home’s equity as a secure line of credit for future purchases. Credit is vital to acquiring new purchases, such as a car or vacation home, and meeting your mortgage payments on time is one of the best ways to build good credit. Improving your credit also puts you in position for lower interest rates on future loans – which means your home investment can pay off, now and in the future.
Financial benefits vary by state and market conditions, so check with your real estate agent and accountant for details.

Financial Benefits

The benefits of homebuying abound – and they can add up come tax time. You may be able to deduct your mortgage interest, real estate property taxes, discount points or other items. Consult with your tax advisor for details specific to your individual situation.

  • Compare owning to renting: Will owning your own home be less expensive than renting? Will you be able to afford the home and its ongoing expenses into the future? To find out, analyze your expenses in this area over the past several years and do some research to project what these expenses might look like in the years ahead.

  • Check your budget: Can you truly afford property in the area? Are there local taxes or service charges? Could you find a less expensive property in an adjacent neighborhood? Consider how periodic and occasional expenses such as mortgage insurance and maintenance will affect your income and budgets.

  • Calculate the complications: Buying a home can alter your financial situation, from tax reporting to credit and beyond. Try to get a complete picture of the financial impacts of homeowning, and make sure you’re comfortable with the changes.