Your home is more than just where you lay your head and where your heart is — it’s also one of the most significant financial investments you will ever make. While some of the advantages of homeownership are immediately apparent, there are some you may not think about as you consider purchasing a home.
Aside from being a place to create treasured memories with your family, owning a house offers many financial benefits, and these advantages aren’t limited to tax season. June is National Homeownership Month, so it’s the perfect time to learn about why owning a home is a smart investment you can make for your future.
Homeownership Financial Benefits
Owning a home allows you to build your wealth over time as you strengthen your financial future. In a strong economy, home values increase, so owning a home is like putting your money into an investment account that continues to grow. However, it is important to note that this is only true if you buy a home you can afford and continue to afford for the life of your mortgage.
When you purchase a home, you are also amassing equity that you wouldn’t if you were renting. In a rental scenario, you pay your rent each month, and that money doesn’t accumulate. When you buy a home, you build equity as your home’s value increases and as you pay off more of what you owe on it.
You are also able to use the equity you’ve built for home improvements or paying off other debt, to name just a few uses. At 78.6%, homeownership rates are highest among Americans aged 65 and older, indicating that equity also contributes to retirement savings for many.
When you rent, you aren’t guaranteed the same rate year over year. Rather, the amount you pay to live in your home is at your landlord’s discretion and subject to change. On the other hand, with homeownership, you most likely have a fixed rate and can better budget predictably for the life of your mortgage loan. Further, when you own your home, you can set goals such as installing more energy-efficient appliances that continue saving you money in the long run.
Another benefit of homeownership is that a mortgage is sometimes referred to as “good debt” and increases your credit score provided you pay it on time. It may also help your creditworthiness when you apply for other forms of credit.
Pay It Off
A benefit that may be hard to fathom, especially if you have just started mortgage payments, is that you will eventually pay off your home loan. Once the terms of your mortgage have ended and your house debt is satisfied, you will be able to use the money you previously spent on your mortgage each month to invest elsewhere.
Homeownership Tax Benefits
At tax time, you can file for deductions for the mortgage interest and property taxes you have paid out in the previous year. As most of your mortgage goes toward owed interest rather than principal in the first few years of the loan, these deductions help put money back into your pocket.
If you have private mortgage insurance (PMI), you may also be able to deduct these payments. And, if you’re in the first year of repaying your mortgage, you can also write off any mortgage points you have paid as well as the origination fees as part of your closing cost deduction.
Chris Doering Mortgage Is Your Homeownership Dream Team
Are you tired of renting and ready to experience the many benefits of owning your own home? Finding trusted advisors to walk you through the mortgage process and be there for you long after closing is easier than you may think. Let the experienced team at Chris Doering Mortgage offer you our expert guidance on the mortgage that will best suit your family’s needs. Contact us today to find out more about how owning a home is a wise investment for your current and future financial health.