More Americans own their own homes today than ever before. Does that mean it's always a good idea?

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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