Benefits of Owning a Home
Although buying a home can be one of the scariest decisions you make in your life, it can be one of the most beneficial. How can you tell whether owning a home would benefit you? A good way to find out is by comparing all the ways that owning a home can affect your life
|
Advantages
- Build equity
- Tax advantages
- Stable monthly payments
- Place for your family to live
- Establish credit
- Gain sense of community
|
Disadvantages
- Ties up your cash
- Moving can be difficult and complicated
- Maintenance and repairs may cost a lot of money
- No guarantee that your home will increase in value
- Less flexibility in choosing a new job location
|
Build Equity
As you make payments, you reduce the principal and increase your share or "equity" in your homes value. If your home increases in value through an increase in the value of a home – appreciation, equity builds even faster.
Tax Advantages
When you own a home, you can deduct mortgage interest and property taxes from your federal income taxes and some state income taxes. These deductions can mean significant tax savings. (You may want to consult a tax advisor for your individual situation.)
Stable Monthly Payments
If you choose a fixed-rate mortgage, you'll pay the same monthly principal and interest for the entire term of your loan; although the payment can go up slightly if your property taxes and insurance costs go up. A home can provide security against inflation because your monthly payments will stay the same month after month, even when inflation leads to higher prices.
Place for your family to live
Owning your home provides you with independence, more privacy and security in knowing that you and your family have a place to live.
Establish Credit
Owning a home will help you establish financial credibility.
Gain a Sense of Community
Being established in a community provides a sense of belonging, stability and security. Maintaining the value of your home gives you reason to care about your neighborhood conditions.