Owning a home is a desire at the core of the American Dream. Home ownership provides shelter from elements, stability for the family, pride of ownership, builds self-confidence, wealth and offers tax benefits.When comparing home ownership to renting, there are multiple benefits owning a home offers over renting.
As a renter you have no control of your destiny. You live at the whim and will of your landlord. If your landlord decides you need to pay more, you do so or leave. When something breaks, you need permission to fix it. You take what is given, no choice in color or selection here! There is no peace with renting.
In home ownership, you control your own destiny. You decide when and if it’s time to move. You decorate as you please and you alone are responsible for maintenance and upkeep.
Each month when you pay your mortgage payment you build your net worth. Unlike rent payments, a portion of the money you pay goes toward building equity (i.e. the difference between the market value of the house and the amount still owed on the mortgage).
If you purchase in an area where the prices are appreciating, you will enjoy the increasing value of your home. After a few years, you may even have enough equity in your home to sell it and put a down payment on a larger home, as your family needs increase.
Best of all, at year end you can deduct the mortgage interest and real estate taxes from your income taxes. This benefit alone out weights the benefits of renting for most people.
Finally, when you sell your home, the IRS rules allow you to avoid taxes on up to $250,000 (or $500,000 if you are married and filing jointly) of profit from the sale of your home.
Owning your own home is the easiest way to increase your wealth. It is a “forced savings” you contribute into each month. Over time your equity will increase and so will your net worth. Have more questions? Please call us…