Are you thinking of being a home owner? It is nice to dream about it isn't it? For those of us who have bought a home know exactly where you are if you are still renting and want your own place that you own. Well, besides feeling good, here are some practical, make sense reasons why home ownership is a good idea.
Owning A Home Is Good For The Soul
Freedom - The home is yours. No one can take it away from you - unless you do not pay your mortgage or your real estate taxes. Nor can anyone really tell you what you can or cannot do in your own home. Of course there are limits according to the law, but these apply no matter whether you are renting or sitting in your own home.
Stability - Buying a home is a statement about staying put for many of us. This is especially true if you have a family or are planning on having a family. Some factors that go into buying a home is proximity to hospitals, schools and emergency services along with quality of the neighborhood etc. Being in one place for a while allows you to make long lasting and in some cases life long friendships. This is something your children can grasp onto as they grow up is the stability that you show with being in one place over a period of time.
Owning A Home Is Good For The Pocketbook
Easy to Budget - This relates to your monthly housing expenses related to your mortgage payment. As a renter you are always subject to a landlord who can increase your monthly rent as time goes along. With a fixed rate mortgage your payment will never change. With a steady payment it is easier to budget and to count on your budget remaining the same over time.
Increase Networth - When you make the switch to being a home owner from a renter you make a major jump forward in your ability to add to your personal networth. According to David Bach, author of The Automatic Millionaire, homeowners on average have a networth of around $175,000 whereas a renter has a personal networth of less than $5,000. The more you pay into your mortgage principal the more networth you gain. Also, the more your home appreciates in value, the higher your personal networth goes. Networth is calculated by adding up all of the value for your assets (cash in the bank, auto value, home value, gold bars etc.) and subtracting the amount of money you owe on them (mortgage balance, auto loan balance, etc.)
Appreciation - Since we just mentioned it in Increase Networth above, appreciation is the increase in value of your home over time. In general, with the exception being the housing crunch of 2007-2008, your home's value increases every year.On average, according to the National Association of Realtors, home sales prices - directly translates to home values - have increased an average of 6.5% since 1972. What causes home values to increase over time is demand for homes going up because the population in the U.S. is going up every year. With more and more people needing a place to live, the demand on homes continues to rise, which increases property values.
Tax Advantages - Thanks to the U.S. Government and the I.R.S. Tax Code, the money that you pay your mortgage company for mortgage interest is tax deductible. See Tax Deductions for Homeowners for more information. But, this is a nice benefit to gain that comes with owning and financing a home over renting. That we know of, there are no tax breaks for renting. If you have to make some type of housing payment why not make it towards a mortgage versus a rent payment?
