3 Financial Benefits of Owning a Home
I'm sure you've heard this one before: there are clear financial benefits to owning a home. Chances are you already know it increases equity, gives you the chance to build your net worth, and appreciates home values.
But truly, what does it all mean for everyday folks like you and me? Well first let me tell you: if you’re a renter, it’s never too early to considerhow homeownership can secure a stronger future for your family.
Here are 3 financial benefits of homeownership:
1. You won’t always have a monthly housing payment
Personal finance advisor Dave Ramsey explains:
“Every payment brings you closer to owning the house. When you pay your rent, that money is spent. Gone. Bye. Not returning. But when you pay your mortgage, you work toward full ownership.”
As a homeowner, you can eventually eliminate the monthly payment you make on your house. That’s how homeownership can drive stability and savings in your life.
As soon as you buy a home, your monthly housing costs begin to work for you as forced savings in the form of equity.
When you build equity and grow your net worth, you can continue to reinvest those savings into your future, maybe even by buying that next dream home.
2. Homeownership is a tax break
One thing people who have never owned a home don’t always think about is that there are tax advantages of homeownership. The same article states:
“You have tax advantages. Many of the costs of owning a home—like property taxes—are tax-deductible. And if you’re paying off a mortgage, you’ll get to count your mortgage interest as a deduction when you file your tax return.”
Even you’re living in your first home, it’s a big financial advantage to have some tax relief tied to the interest you pay each year. That’s one thing you definitely don’t get when you’re renting.
Find a tax professional to get the best possible benefits on your annual return.
3. Monthly Housing Costs Are Predictable
A third benefit is that monthly costs start to become more predictable with homeownership, something that doesn’t happen if you’re renting. Ramsey also notes:
“Rent rates will go up. Even if you found a killer deal in a hot area, inflation, competition, and rising property values will cause your rent to go up year after year.”
With a mortgage, you can keep your monthly housing costs relatively steady and predictable. Your monthly costs are most likely based on a fixed-rate mortgage, which allows you to budget your finances over a longer period of time.
Rental prices won't stop increasing since 2012, and with today’s low mortgage rates, it’s definitely a great time to get more for your money by purchasing a home.
If you want to lock in your monthly payment at a low rate and have a solid understanding of what you’re going to spend in your mortgage payment each month, buying a home may be your best bet.
By the way, if you or someone you know ever tried to get a mortgage but the application was denied, read this.
Becoming a homeowner takes you towards greater financial security and savings. Call me! I'll be happy to answer all your questions.
In the meantime, check out my FREE guide for 1st-time homebuyers, even if you don't plan on buying a home this year.
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