Benefits of Owning a Home
Posted on January 27, 2015
You might be thinking that it would be a major financial move to purchase a home and probably have dozens of questions about it. Owning a home has many advantages: increased privacy, more control, pride of ownership are only a few things that come to mind when owning your own home. Did you know that there are also sound financial benefits to owning property as well?
Building Equity: When you own a home you are paying a mortgage every month, instead of giving your money to a landlord for them to pay off theirs! With each mortgage payment, your equity in the property grows. Depending on how long you plan to live at that property, when it comes time to put it on the market, you may even have enough equity to make a profit when you sell it.
Tax Benefits: The interest that you pay on your mortgage is tax deductible, as well as some of your closing costs for the purchase. Property taxes on your real estate are also deductible. If you have equity in your home and secure a home equity line of credit, that interest paid is also deductible. Lastly, if you happen to sell your home for a profit, you will not owe any capital gains taxes unless the proceeds are over $250,000 in profit for singles or $500,000 if married.
Buying Smarter than Renting: Currently rents are increased by up to 20% in the Chicagoland area. If you purchase, factoring out the closing costs, in many cases you will see currently that a mortgage can be a lower monthly outlay than your monthly rent payment. You will be paying yourself, building equity, rather than paying of someone else’s mortgage.
Asset Diversification: While your home already is an asset, there are other ways you can maximize your homes ability to create wealth. Unlike other investments, you get to live in this one while it grows. If you have spare rooms in your home you could rent it out to pay down your mortgage faster. Also, if you use your home as your business, you may look into using the home office as a tax deduction.
Savings: Paying off a mortgage is healthy for your finances as it creates a forced savings account as you build your credit and build equity in your home.
If you are at all curious about home ownership, I would be more than happy to answer any of your questions. Did you know that you could purchase a home with as little as only 3.5% down?! Whether you wish to start the journey to home ownership, have questions about investing or rentals or want to sell something you are in currently and downsize or move up to something bigger, we can begin now!