Why
buy a home instead of rent one? Until not that long ago, homeownership
was within the reach of just a few. You may want to have
a place you can call your own, or have a secure place to invest
your hard-earned money. Owning your own home has many benefits
both tangible, like tax deductions, and intangible, such as having
a yard for the dog you've always wanted.
Savings
Goals
When your buy a home, your monthly payment serves as a type of
scheduled savings plan. Over time, you gradually accumulate what
lenders call "equity" - an ownership interest that you
can borrow against or convert into cash by selling the house.
When you rent, your payment does not allow you the opportunity
to build financial equity. To determine whether it is worthwhile
for you to buy a home or continue renting, try this calculator.
Housing Costs
Another advantage of home ownership is that while rent typically
increases from year to year, the principal and interest portion
of most mortgage payments remained unchanged throughout the term
of the loan (fixed rate loans). Even payments to variable rate
loans change with more predictability than many rental payments.
In fact, because of the effect of inflation, this means that over
the years, you pay the same amount but with ever "cheaper"
dollars.
Investment
Homes typically increase in value, or "appreciate,"
over the years. It's not unusual to find a house that sold
for $50,000 fifteen years ago to be valued at much more than that
today. This increase, or price appreciation, adds to the equity
you build with your monthly mortgage payment, which becomes profit
if you ever sell your home. The housing market fluctuates,
however, so appreciation should not be your primary motivation
in purchasing your home.
Tax Benefits
Homeowners also get significant tax breaks that are not available
to renters. Property taxes and interest paid on a home mortgage
are usually tax deductible. This alone can save you a substantial
amount each year in federal income taxes.
To find out more about how homeownership can benefit you, call
or email me today!
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