Home ownership is a financially savvy move. The JulieGR Real Estate Team lays out the 4 Benefits of Home Ownership.
1.) You build equity
Equity is the difference between the market value of your home (how much you can sell your home for) and the current mortgage balance you have on the home. Every month the amount of principal you pay increases and the interest that you pay decreases. Just by paying your minimum payment you gain equity, even with no increase in value (and that’s being extremely conservative – historically prices have consistently increased). You can accelerate that by making bi-weekly payments rather than monthly payments. This will add one extra payment per year and take 7 years of your mortgage!
2.) There are tax benefits
Homeowners are able to deduct mortgage interest and property taxes from their income. On top of being able to deduct, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their home for a gain.
3.) You’re paying for housing whether you own or rent
When you rent a home, your money is going towards paying down the principle of the landlords house, when you own it goes towards paying down your principle. On average we have experienced that the monthly payment is approximately 40% cheaper to buy than to rent. Part of the reason for this is that property taxes on homes that are owner occupied get the principal residence exemption which lowers taxes by 18 Mills or approximately 40%.
4.) Creative control of your home
Once you purchase a home, then you have the power to decide how to approach home maintenance (Complete creative control!). Do you want to retile your kitchen? You have the freedom to do it yourself or pick your own contractor. Do you want to paint your walls an exotic color? Get permission from your wife first, and then go ahead and paint away because you own your own house!
To Sum Up:
Homeownership makes sense financially. If you are considering purchasing a home this year, contact us today! We’re never too busy for your referrals!