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Jumping into homeownership for the first time can be scary. However, taking a good long look at the many benefits can help ease your fears.

For decades, homeownership has been a big part of the American Dream. While the common phrase of the “American Dream” may have become distorted over the years, it has always included owning a home.

If you’re looking to buy your first home, understanding the benefits can help. Let’s look at some of the top benefits of owning a home.

Top 5 Benefits of Owning a Home

1. Ability to Build Equity

When you rent, you have no ability to build equity in your home. Actually, you are helping your landlord build equity in the property.

Owning a home allows you to build equity. As the property value goes up and your mortgage balance goes down, you built more equity in your home. The longer you stay in the home, the more you will pay towards the principal balance of your mortgage. This will build even more equity, especially as property values also rise.

2. Freedom

You have to adhere to specific restrictions when you rent a home. There will be no remodeling or changing anything about the home. As a homeowner, you get to choose what you do with the property.

When you decide to buy a home, you can make improvements, cosmetic changes, and more. The only restrictions you might have to deal with come from a homeowner’s association. Usually, those restrictions have more to do with the landscaping and exterior of your home, than the inside.

3. Payment Stability

Renting a home means you could see the rent amount go up every year. While this might not seem like a big deal, if you stay in the home for five years and rent goes up even $25 a month each year, that’s a $125 monthly increase.

Owning a home gives you a stable monthly payment. If you take out a fixed-rate mortgage, your monthly payments won’t change. You can easily budget for the payment without worry.

The only thing that could possibly change the payment on your home is an increase in taxes or insurance. If you pay these two expenses as a part of your monthly mortgage, you might see a small change every five years or so.

4. More Affordable Than Renting

While owning a home comes with many costs, over time, owning a home is cheaper than renting. Yes, you have to pay a down payment, homeowners’ insurance, an appraisal fee, and other upfront fees. While the upfront cost is certainly more to buy a home, this isn’t the case over the long haul.

Renting often costs more on a monthly basis than buying, too. In some cases, you may pay less or the same amount for your monthly mortgage payment as you would to rent a similar home. Over the course of a 20- or 30-year mortgage, you will pay far less when you buy.

5. Ability to Build Credit

If you want to build credit, buying a home offers a great way to do so. Of course, you will need to have some good credit to buy a home. One of the best ways to build credit, however, is to have a loan you pay on time for many years on your credit report.

Mortgages tend to be 15, 20, or 30 years long. When you have a mortgage on your credit report, it can help to lengthen the average of all your accounts. Every month the mortgage is paid on time, you will be building your credit.

There are many benefits to buying a home. When you stop renting and become a first-time homebuyer, you not only gain the five benefits above, but you also gain the pride of homeownership. Most people also find owning a home to give them a sense of stability.

While renting a home often provides you with a place to live, owning offers more. The home is yours and you get to make decisions about the property. Becoming a homeowner offers plenty of benefits. These are just a few of the top advantages you will enjoy.