The Advantages of Home Ownership

The Advantages of Home Ownership

Is Owning the Way to Go?

You've been renting for awhile. You've enjoyed it. You have the freedom to move without the worry of selling a home first. You don't make repairs or pay property taxes. But something's missing, a sense of security, or perhaps a gut feeling that your monthly payments are going into a bottomless pit.

You think it might be time to take a step in another direction. You're ready to buy a home, but you have some questions about the benefits of home ownership.

Tax Advantages
The US government allows tax incentives that make it possible for many homeowners to exceed the standard yearly deduction. Your state may offer the same benefits.

Deduct the yearly interest on your primary and vacation home. This amount equals a big chunk of your total payments for the first several years.
Deduct the total amount of your yearly property tax bill.

You might wish to refinance to consolidate other debts. These loans typically carry a lower interest rate than the debts they replace, plus, the interest on the home equity loan is tax deductible.

Stable Costs
Monthly payments can change if property taxes and insurance go up, but increases usually happen gradually. Rental fees can sometimes be more unpredictable.

An adjustable rate mortgage can result in higher payments. That's a scenario you should discuss with your lender before selecting a loan.

Appreciation
No one can make any guarantees, but over time most real estate increases in value. If you are careful about your selection and you treat the home kindly it will likely be worth more in five years than it was the day you bought it.

Your initial investment may be as little as 3% (or less) of the home's sales price, but you are the one who benefits from appreciation of the property. Not the bank, not the landlord. You.

Equity
Even though interest makes up a good portion of your monthly payment, the amount paid toward the principal increases each month. Paying down the principal increases your equity in the home: the portion of the home's value that is truly yours should you decide to sell.

Appreciation and equity work together, helping you use your initial investment to move into a higher priced home.

Control
The house is yours. You are the only one with the power to allow anyone to enter the house to inspect it. Paint it and decorate it in any way you wish. Put nails in the walls to hang pictures and artwork. Bring home a pet without asking anyone if it's OK. It belongs to you.

Happy house-hunting.

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