The housing market is on fire right now. Low interest rates have made purchasing a home extremely affordable. If you’re on the fence about whether or not buying is the right move for you, here are some of the best things that come from being a homeowner.
Owning a home is a tremendous asset. When you rent, you’re paying someone else for your space and that’s as far as your money goes. When you own a home, your mortgage is an investment into your future. Property values increase over time. Despite a few dips in the market, this steady rise in home values is something you can count on. When you invest in a home, you’re adding to your personal net-worth, and long- term wealth in a way that renters cannot.
There are some serious tax advantages to being a homeowner. An article written by Amy Elms for businessinsider.com explains, “One of the immediate monetary benefits of purchasing a home is the ability to deduct most or all of interest payments made on a home loan, property taxes, and loan points. This is because in the early years of owning a home, most monthly payments go towards interest payments.” This means, as a homeowner, you can deduct first and second mortgage interest, home equity loans (up to $100k), refinanced loans, and local property taxes. There is also the possibility of deducting state real estate taxes as well. As you can see, tax season is a great time to be a homeowner!
Being a homeowner means being in charge. You don’t have to adhere to the rules of a parent, or landlord. It’s much easier to live as you please and make any changes you want to your space. Additionally, owning a home mean freedom from roommates. There’s also a financial freedom that comes with purchasing a home. With interest rates as low as they are, there’s a really good chance a mortgage will be cheaper than rent.
Equity is defined as the current market value of a home minus any outstanding liens or home loan balances. As you pay down your mortgage and make improvements to your home, you will put yourself in a position where you have created positive equity. When you decide to upgrade certain aspects of your home (new flooring, updated light fixtures, new appliances, landscaping, etc.), it equates to money on the back end. Simply put, you will be reimbursed for any upgrades you make on your home because those improvements will be reflected in the sale price. Equity is a wonderful thing. It’s a kind of like a security blanket. You know that that any money you spend on your home will eventually be returned to you. Renters can’t necessarily say the same.
There are a plethora of reasons why owning a home is wonderful. Not only is it a good investment, it’s a way to start building generational wealth.