Why Owning a Home is a Smart Financial Decision
Homeownership makes “cents” from tax advantages to future financial stability, but many people are left to maneuver the ins and outs of homebuying without guidance, which often leads to renewing your lease year after year because you just don’t know where to start. We’re here to assist and help you understand the perks that come along with owning a home, especially if it’s your first time buying. For many reasons, homeownership is one of the best decisions you can make. Here are our top five reasons why owning a home is a smart financial decision:
- Tax advantages: Your biggest tax break is reflected in the house payment you make each month. The first year you buy your home, some closing cost deductions are also available. Origination fees of 1 percent or more are common, which makes the savings a considerable amount. Real estate property taxes paid on your primary residence is also fully deductible for income tax purposes.
- Owning a home creates wealth: Not only can buying a home allow you to put down roots, make memories and become part of a community, but it also contributes to the wealth of your family. Homeownership is a form of “forced savings,” meaning every time the mortgage is paid, your net worth grows.
- Renting is still more expensive than owning: More than likely, thanks to low interest rates and affordable homes in our communities, your monthly house payment will be equal to or less than what you were paying a landlord to rent.
- Owning a home requires you to spend smarter: When you have the proud owner status, you have the freedom to design your new home the way you want. Instead of sending money to your landlord, you can spend your extra dollars on paint colors for the bedroom, hallway, or bathroom. Invest in your home and the equity it will bring, as opposed to paying for someone else’s investment.
- Equity and future investments: Monthly mortgage payments, which are sometimes lower than rental costs, are used to pay off your home and lead to eventual full homeownership, while paying rent provides you no long-term benefits. Plus, with the goal of one day completely paying off your home, you will be left with additional income that can be spent on leisure activities, investing in yourself or your family, or donating to community service organizations.