Getting a home loan credit score is important to get the best interest rate possible. It is also a crucial step in securing the home of your dreams. But let’s talk about what your home is and what it is not. Some people say it is an investment and others say that it is not an investment but a place where you live. We’ll go into the details in a bit.

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The benefit of owning your home is that it is yours forever. This is only the case if you can continue to pay the taxes and mortgage, unless of course you have paid it off in full. There are psychological, emotions, and social reasons for owning a home and that should trump all the financial reasons.

With a home of your own, you do not ever have to move. No landlord can kick you out and no lease can be terminated, changed, or absolved. You don’t have to worry about rent being raised or changes to your property without your permission.

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Having a home is also a way to save money. With a traditional 30-year fixed mortgage, each month at that you pay your mortgage is paying down your loan. In a sense, it is like reverse saving. It forces you to make the payments that you normally may not have made on your own. This is especially useful for people who have a hard time stocking away a set amount of money each month.

With a home of your own, you can deduct property taxes and mortgage interest on your yearly taxes. This can cut the taxes you would have to pay by a bundle. Renters do not have this luxury of cutting taxes without a mortgage or property taxes.

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You will get some appreciation with your house value. Typically on the east and west coast, real estate has out performed S&P’s 500 for the past 30 years. But nationally, it is catching up to S&P’s 500 index. In terms of volatility, housing beats out stocks because it is a steady increase over many years. Note that in some places, over the past 30 years there were modest declines and flat values.

On the flip side, a house can also be a money pit. There are always seemingly endless supply of repairs that need to be made. Renovations, improvements, and upkeep needs to maintain the house. There are other factors such as insurance and not to mention small improvement projects.

All in all the cost of owning a house is generally more expensive than renting, but it is the appreciation of the house that causes people to go for owning a house.

The bottom line is to not buy a house that is over your needs and over your budget. Plan to stay for a long time and don’t view your house as a retirement savings or investment savings.

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