Skip to main content

The Top 5 Benefits of Owning a Home



Purchasing a home can feel like an overwhelming project, but the long-term advantages of homeownership make it a smart investment to secure your future where the benefits extend beyond simply having a place to live.

Building equity is one of the most significant advantages of owning a home. As you make mortgage payments, your equity increases, and over time, your home can become a valuable asset to use the equity to finance home improvements, pay for college tuition, or even as a down payment on a second home.

Two factors determine equity; the home going up in value and the unpaid balance of the mortgage being paid down.  Appreciation is the increase in value expressed in an annual amount.  Homes have averaged 4% nationally for the past 50 years.  Amortization is the systematic principal reduction that occurs with each house payment made.

Another advantage of buying a house is the stability of housing costs. With a fixed-rate mortgage, your monthly principal and interest payments remain the same for the life of the loan, giving you predictable and stable housing costs. This can help in your financial planning.

Control over your living space is also a significant benefit of owning a home. You can make changes and improvements to your home to suit your needs and preferences without having to get permission from a landlord. This can help you create a space that truly feels like your own and can contribute to your overall sense of well-being and satisfaction.

Finally, homeownership also offers several tax benefits that can contribute to long-term financial savings. You may benefit from itemizing deductions for interest and property taxes that would exceed a person's normal standard deduction.  Regardless of which deduction a homeowner takes, additional tax advantages apply to home ownership like an exclusion of up to $500,000 of capital gain for married, filing jointly taxpayers and $250,000 for single filers who meet the occupancy and use requirement.  

The long-term advantages of buying a house are significant, including building equity, stable housing costs, potential appreciation, control over your living space, and tax benefits. Although the process of purchasing a home can seem overwhelming, the benefits of homeownership make it worth considering. Ensure that you do your research, get pre-approved for a mortgage, and work with a qualified real estate agent to find the right home for your needs and budget.

For more information, download our Buyers Guide and Homeowners Tax Guide.

Comments

Post a Comment

Popular posts from this blog

Building a Case for Homeownership Today!

Over the last 60 years, the average sales price of homes has appreciated at a rate of 5.56% annually, according to the Federal Reserve Economic Data . During the same period, rent has increased at a rate of 3.88% annually which presents a compelling argument in favor of homeownership. When the figures are analyzed, it becomes evident that homes have not only appreciated in value at a faster rate than the increase in rental costs, but they have also provided homeowners hedge against inflation and a substantial asset that builds equity over time. In the report called "Building a Case for Homeownership Today!", the reader will discover the real cost of homeownership is most likely less than they are paying in rent because of the two powerful dynamics of amortization and appreciation that are not currently working in their favor.   As they continue to rent, the dynamics work in favor of their landlord. The median homeowner has a net worth of $396,000 compared t...
Post a Comment
Read more

Home selling strategies for downsizing seniors

Downsizing can be a significant life transition for any age person, but especially for seniors who may have lived in this last home for some time. Follow these suggestions to make the downsizing process smoother and less stressful. Start Early: Begin the downsizing process well in advance of your planned move. Give yourself plenty of time to make decisions and avoid feeling rushed. Assess Your Needs: Evaluate your current and future needs in terms of space, accessibility, and location. Consider factors like health, mobility, and proximity to family and healthcare facilities. Create a Plan: Develop a comprehensive downsizing plan that outlines your goals, priorities, and a timeline for each task. Having a plan will keep you organized and focused. Declutter: Go through your belongings room by room and decide what to keep, donate, sell, or discard. Be realistic about what you truly need and use regularly. Seek Professional Help: Consider hiring a professional organizer, downsizing...
Post a Comment
Read more

Handling an Appraisal Gap

An appraisal gap describes the difference between the sales price and the lower amount of the appraisal required by the mortgage being obtained by the buyer.   It becomes an issue if the seller is not willing to lower the price or the buyer is not willing to pay the difference in cash. Looking at the issue from the seller's perspective, "if the buyer wants my home and he can't get the loan he wants, he'll have to make up the difference in cash."   The buyer might have a different view like "If an independent appraiser can't justify the price, I'm not going to pay more than appraised value." Pay the difference in the appraised value and the purchase price in cash.   Solution - Assuming the buyer has adequate cash reserves and is willing to pay above appraised value, this will satisfy the lender. Decrease your down payment percentage to apply toward the appraisal gap.   It may trigger mortgage insurance which will increase your paym...
Post a Comment
Read more