No question that there are some distinct advantages to home ownership. Some presidents like Former President Clinton made it a major initiative to make sure that all people had a chance for home ownership. Over the years, the reasons for buying a home haven’t changed, but these days it seems that it’s more important than ever to today’s consumers. Here are the top five reasons why we believe one should buy a home.
1) Building Equity. You have heard that renting is throwing money down the drain and that wouldn’t be wrong. Rent is money you are never going to get back. However, that same amount of payment each month could go toward paying down the principal balance of the house. The lower the balance, the more money in your pocket when it’s time to sell.
2) A home mortgage is one fixed cost you can always count on. Expenses always seem to rise year after year, but not your mortgage payment. Rents rise, but a 30-year fixed mortgage will be the same payment in month one as it is 360 months later.
3) Tax breaks. Currently, the IRS allows you to deduct the interest you pay on your loan from your taxes. For many people, this one of their largest tax deductions. There is some talk of limiting this, but for now it appears to be safe. How much longer it will be safe is anyone’s guess, so try to take advantage of it now.
4) Appreciation. For some people this is a dirty word. There is no question that some homes appreciated at a rate that was not sustainable. As result, they depreciated as quickly as they rose. Now that most of the United States has hit bottom in housing pricing, it’s safe to say that we’ll start seeing appreciation again in the value of our homes. It won’t be like it used to be. This time around it should be steady and slow.
5) Social Benefits. When surveyed, most people said that they are happier in an owned home than a rented one. Owning homes can you make part of a community where you can share social relationships with neighbors. In general, home ownership provides greater stability and that in turn can lead to greater happiness.
If I have missed any outstanding reasons, please feel free to write me or reply to me. I will look forward to your comments and can include them in a future column.
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