The decision that everyone needs to take when buying a house is whether they should take a mortgage for 15 or 30 years. With a 30 year mortgage the borrower will get lower monthly payments, but higher interest rates. The advantage of a 30 years mortgage is that people can afford to buy a larger property. On the other hand in a 15 year mortgage the payment will be higher with lower interest rates. The advantage of this kind of mortgage is that people will gain more profit and own the property sooner.

Having a plan is a way to choose which option fits best for you. If the plan is to build equity as soon as possible, consider the 15 year mortgage plan, keep in mind that by having higher payments every month it will be hard to save money out of your income. If that’s the case a 30 year mortgage plan will be the one that better fits you since you will be able to get a bigger property and still have some left over from your income to save thru the year.

Renting is another option. The biggest advantage of renting is that you don’t have to be stuck in a same place for years, instead, you can simple move out if you dislike the area of work is far away from your current location. The disadvantage is that all the money you are investing every month is going to the trash since rent is not tax deductible and you are not gaining any benefits.

Buying a home gives the option to deduct your interest up to 1 million dollars. By using the house as security you can also deduct the interest up to $ 100.000. It also help you not to pay taxes from any profit make in the sale of the property.

Return and risk is a concern to everyone when planning to invest in a real state. Return is the award from investing. Return consists in periodic cash payments and appreciation in market value. Risk is the variability of possible returns from the given investment. As you get higher return your risk is higher as well.

During this analysis I had realized that buying a house is a more convenient option. Buying a home will benefit from gaining equity and also receiving money from taxes at the end of the year. I consider that a 30 year mortgage is the best option because, it provides more financial freedom, it will help you get a bigger house with lower monthly payments and you will still have extra money to be put into your savings.