Home Buying — Why Own a Home?
Here’s why you should buy a home.
Today, over two-thirds of people in the U.S. own a home and the number is rising!
Some people enjoy the flexibility and low responsibility of renting. You can live in a particular neighborhood for as little or as long as you want. And most maintenance and repair responsibilities fall on your landlord. All that is fine but there are good reasons for owning a home.
Building Equity
During the early years of most mortgage loans, the majority of your monthly payment goes towards the interest on your loan. Over time, more and more of your monthly payment goes toward reducing the balance, or “principal.”
Every time you make a payment, you increase your share or “equity,” in your home’s value. The good news is that if your home increases in value through appreciation, your equity or “share” will build up even faster.
Building equity in your home is one very important aspect of ownership. For many people, equity is used as a vehicle to plan for retirement and other future goals.
Great Tax Advantages
Did you know that you can deduct mortgage interest and property taxes from your federal income tax and from some states’ income tax. This could mean significant tax savings for you, especially in the early years of the loan when most of your payment is going towards interest. That means you get it all back!
After calculating your taxes, you may find out that it’s cheaper to buy than to rent.
Payment Stability
If you finance your home with a fixed-rate mortgage, you will pay the same monthly principal and interest payment for the term of the loan. Even when inflation leads to higher prices, your payment will be the same month after month. Keep in mind though that your total monthly housing expenses could vary if tax and or insurance rates change.
A Sense of Community
When you purchase a home it gives you a sense of belonging and permanence. It involves you in the welfare of your community and gives you a sense of pride and ownership not associated with renting. You also gain the freedom to design and decorate your home as you please.
