Owning a home might be every American’s dream. But buying a home is one the most crucial and biggest financial decision one can ever make in his whole lifetime. There are many advantages of owning a home. However, there are also many disadvantages that must be considered carefully before making a decision to buy a home.
Disadvantages of Home Ownership
- It is a long-term financial commitment.
- You have to take responsibility of maintaining the home. It means you spend for minor and major repairs.
- You must expect an increase in monthly expenses. The more space means you need more heating and cooling. Generally homes are built away from the city, so it means you have to commute. That is another additional expense. You will have new expenses such as maintaining the lawn, sewer and more water usage.
- It can impair the mobility and flexibility of the home owner if there are changes in financial situation such as migrating to another place because of a more promising job, divorce or death of a spouse.
- If you are buying a house on a mortgage, the payments are usually fixed and higher than rent payments.
- You need a large amount of cash for down payment and closing costs.
- The value of the home may not appreciate for a few years.
- If you do not regularly pay your monthly mortgage, your home might be foreclosed.
- A home owner is responsible for real estate taxes and insurance. Taxes may increase in the future as cities and counties look for ways to fund their budget.
- Home owners are exposed to various risks caused by fortuitous events like fire, storm or earthquake. If the home is destroyed or goes up in smoke, your investment is totally lost.
- The value of the home depends upon the economy prevailing in the locality. You will never know if the value will increase or decrease in the future.
There are undeniably many advantages of home ownership. But we also have to face the fact that there are also disadvantages. But we can overcome the disadvantages of buying a home if we plan and manage the potential risks carefully from the income and expense perspective.
When you sign those contract of sale you will feel secure that your dream of owning a home will be fulfilled without regrets.