Sometimes referred to as the ‘American Dream,’ owning a home is what many families want. Homeownership may seem daunting, but the benefits are promising. Aside from the obvious, there are also not-so-obvious benefits of homeownership that you may not know.
Here, we will look into the financial benefits of homeownership and the commonly known benefits.
Financial stability is the most obvious benefit most families seek when owning a home. Buying a home provides a sense of reliability to first-time homeowners. Over time, the mortgage payment is lower than monthly rentals, which may be pretty quickly after closing, and if you have a fixed-rate mortgage, it stays the same for 30 years.
Another thing is that monthly mortgage payments create equity while monthly rentals return nothing. In short, owning a home gives you financial stability, strengthens your financial portfolio, and helps you get your spent money back!
The most significant tax advantage you can have in owning a home is the option to deduct monthly interest for your tax returns. Your monthly payment is almost all interest on the first several years of the mortgage term. It means that you’ll get a nice deduction when the year ends.
In addition to this, you can also deduct mortgage insurance payments if you have them and other home-related expenses.
You should discuss all tax issues with your accountant to fully understand how it impacts your taxes during the tax season.
On a general note, home prices increase over time relative to the location and region of the property and the local trends. According to a mortgage data firm report, US homes have an average appreciation rate of 3.8% per year. So if you buy a home today for $200,000, that home would be worth $241,000 in 5 years.
Price fluctuation varies in every region. You can use the House Price Calculator of the US Federal Housing Finance Agency to estimate your home’s current value.
Not a financial benefit, but owning a home gives you a sense of pride in your property and the community it belongs. Many homeowners take pride in the relationships they build within their communities. It would feel great to be part of a community and build relationships with neighbors and local businesses.
Owning a home is not just having a roof over your head. It also comes with great benefits! What’s important is to understand these benefits and utilize this to your full advantage before cashing into your dream house.
Are you thinking about buying a home in the New River Valley? If so, these benefits are something to keep in mind. It would be best to begin your journey to homeownership with an expert on your side. If you’re interested in owning a piece of the American Dream, please don’t hesitate to contact us. Please click this link for our contact page, and I will personally assist you with your plans.
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