Buying your first home is a clear indicator of your increased financial stability and achievement of a goal that many consumers wish to obtain. The Credit Union National Association notes that for many Americans, who manage to spend more than they make (see "Saving for (Any) Day), forking over the down payment and purchasing a home is a measure of their prosperity and ability to save.

In addition to its perceptual benefits, there are actual tax and financial benefits that homeowners gain once they leave the rental world. Their home can be a vehicle for withholding wealth through equity. Other than maintenance or one-time expenses, they also have a stable payment for housing, unlike those who have to deal with rent increases. The interest paid on the mortgage of the home is also tax-deductible; owners can also deduct the depreciation costs, or value lost to the wear-and-tear of living in their homes. Renters are subject to rent increases while their landlords reap the rewards of tax-deductions and depreciation on property.

However with all of these benefits, there are some drawbacks or costs to finally becoming a homeowner. When you pay rent, all expenses related to maintenance and management of the building or home in which you live is left to the landlord. As a homeowner, you pay for everything, including taxes, insurance, maintenance, and more, There is more than just the stable mortgage you pay every month, which itself may also fluctuate, depending on your loan terms. Overall, greater freedom from the perils of renting also means greater responsibility as a property owner.

If even after a careful cost-benefit analysis of buying a home you still decide you want to be an owner instead of a renter, the process requires you to both have credit and cash but also be smart about how you use it---whether for down payments, mortgage terms, interest rates, remodeling costs, and all of the factors that play into the largest purchase you may make in your lifetime.

If you have not bought a home, but are in the market for your first one, www.budgeting-help.com provides a number of resources for you to educate yourself about your purchase. See "What You Need to Buy a Home" to get started. From there, knowing the "Benefits and Costs of Ownership" as well as whether you are really ready to buy can help you transition to the responsibility of being an owner (please see articles in the 'Home Ownership' category). Also see the "Two Sides of Home Purchase" for details in finding a home that is right for you, and financing that home once you find it.

References:

Neighbor Works America. Realizing The American Dream

Freddie Mac. Avoiding Foreclosure

Federal Deposit Insurance Corporation. An Update on Emerging Issues in Banking

Federal Reserve Bank OF San Francisco. Innovations in Mortgage Markets and increased Spending on Housing

Freddie Mac. Don't Borrow Trouble

Federal Trade Commission. FTC Consumer Alert

Credit Union National Association. News Now

Freddie Mac. Buying and Owning a Home