Many of the disadvantages of renting are advantages to buying a home. With buying, there is permanence and a pride of ownership. You can change the paint color, the kitchen, the landscaping, the garage, and so on. Generally, the monthly payment is fixed. The decision on how you pay for the house is between you and the bank, and once you decide, you won’t have to worry about payment fluctuations. Buying allows you to use leverage, which means you can own the house using borrowed money, up to 95 percent in some cases. Another advantage to buying is that you get Uncle Sam’s help in buying your home. The interest payments you make to the bank or mortgage company on your house can be deducted on your itemized tax forms from your adjusted gross income or AGI. Finally, you can borrow against the equity in your home. Equity is the difference between what your house is worth and how much you have borrowed to buy the house. In emergencies, you can borrow money from the bank against your home’s equity to meet your specific goals and needs.

However, buying also comes with disadvantages. Mobility is low, since houses are not liquid assets. It would likely be a challenge to sell the house quickly, and it is generally expensive to sell illiquid assets. Other disadvantages to buying include significant up-front costs, such as the down payment, points, title, and title insurance. Living expenses are also higher if you buy a home. It costs more to own and operate a home than to rent. Costs for utilities, repairs, water, landscaping, painting, and so on are avoided when you rent but must be paid when you own. Finally, buying a home is a large financial commitment. Owning a home is a costly investment—in terms of dollars, time, and energy. And because a home is a large financial commitment, you need to remember that there is the possibility that the home’s value could decrease, that its mortgage could default, or that it could need repairs.