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Home Loan EMI vs. Renting: Which one is preferable?

Submitted by admin on July 22nd, 2024

If one is in his/her thirties, especially in his/her early forty, one may have been asking him/herself whether it is wiser to purchase a house or remain in the rented house.

However, this point essentially has to be made that is not a comparison of oranges to oranges since both options are laden with their benefits and drawbacks.

Advantages of Acquiring a Home via Home Loans

Here are a few benefits of buying a home: Here are a few benefits of buying a home:

Asset Creation

Let me begin with the most typical reason people use for taking a home loan and that is you are buying an asset.

Stability

Stability is another such factor Stability is another key factor in selecting a location since the given area should continue to provide positive results for the company for a long period.

Rising Rent in Metro Cities is another big issue that was not previously part of the country’s economic system and was unheard of a few decades ago.

Everyone knows instances or perhaps has a first-hand experience of rent, which has gone high in the recent past, particularly after the COVID-19 outbreak.

Good for Retirement

If a person takes a home loan at the age of 35 or 40 years, one can clear the home loan during the earning phase of life. This implies that you would not have to bother about rent expenditures once you are retired.

Inheritance

A home can be of the kind that is transmissible to the next generation. Consequently, if the child is established in a particular city, they do not have the pressure of acquiring a home. That way, they can be used to fund their business undertakings.

Emotional Benefits

Housing is something that is dear to almost everyone and this is why owning a house is considered to be better than renting.

Reverse Mortgage

A Reverse Mortgage can be defined as the direct opposite of a loan. Here, one gets money through a home equity loan and the bank obtains a fixed amount each month for disbursement.

Benefits of Renting

However, it is worth considering the following advantages of living in a rented house.

Flexibility

If continuity is not an issue, then renting could be favorable to you. Renting can make sense when you do not expect to be located in any given city for more than seven years.

Lower Initial Costs

Normally, renting is far cheaper than owning a house because one does not need to pay thousands of dollars as the down payment and closing costs when buying a house.

No Maintenance Costs

The cost of maintaining the house is also catered for by the lay when you are a tenant, including repair costs.

Conclusion

The main factors that will determine whether it is better to rent a house or buy a house are the financial status, the plans for the future and the judgment of the individual. Thus, keeping in mind the above-discussed factors will be even more beneficial while making the decision.