As the front door closes on the last of the moving men, you look around with a sigh of satisfaction. Your dream home, at last! Finally; the many benefits of home ownership are yours. It’s true, there’s no place like home!
Imbued in the American culture is the idea that owning your own home is a marker of old fashioned financial stability. Owning a home is a savvy move, money-wise.
When the great recession hit, the real estate volatility shook everyone’s confidence in the benefits of home ownership. It’s true, home ownership does build wealth but the proviso is that you must buy a home that suits your pocket. Now that the housing market has rebounded, owning property is back in favor.
You haven’t just bought a piece of ground and housing security, you’ve bought a future. Let’s look at some of the perks of this milestone.
Building equity with every mortgage payment
Unlike renting – where you dollars go in the owner’s pocket – each mortgage payment you make grows your equity and reduces the amount you owe.
The way mortgages work is that the bulk of your payment increases slightly each month, year-after-year. It’s lowest on your first payment and highest on your last payment. Consequently, as time goes by, your equity grows!
In a way, paying the mortgage every month – reducing the amount of your principal as a result – is like a compulsory savings plan. Every month, you put more valuable equity in your home and that’s a good thing.
The tax man becomes your friend
With tax benefits like mortgage tax deduction, homeowners are allowed deduct the mortgage interest from their tax obligations. For many people this is an enormous deduction, since interest payments can be the largest portion of your mortgage payment in the early years of homeownership.
You can deduct some of your closing costs in the first year you buy your home.by claiming the points – also known as origination fees – on your loan, whether paid by you or the seller. With origination fees of 1% or more as standard, the savings can be significant.
And don’t forget that real estate property taxes paid on your primary residence are also deductible.
Personal paybacks of your own home
One of the hidden benefits of home ownership is the freedom that comes from achieving this major life goal. First-time homebuyers find that once they have bought a house, other facets of their personal life tend to fall in place. With the peace of mind that comes with home ownership, other goals turn out to be much easier to attain.
Owning a home ties you into the community with a sense of belonging. The city and its people become your city and your people. Community events have an impact – schools, roads in your area matter more. You get to know your neighbors.
Home ownership represents a strong commitment and a sense of stability. A landlord can’t tell you it is time to move, your children don’t have to change schools, and you can plan for the future.
It’s your home! Decorate to your taste, change what needs changing; you don’t have to get permission to remodel or alter the landscaping. Your home truly is your castle.
One of the final benefits of home ownership that can’t be ignored is the pride that you feel when you own your own home. You can achieve epic goals and can give your family the security it needs to move forward in life.