Everyone wants to make smart choices financially that will help their future. Do these include buying a home? If not, it should. Here are 5 financial benefits to owning a home.
- Tax breaks: As a homeowner, you may qualify for tax benefits. These deductions can help offset other costs of homeownership. Potential deductions include the interest on your mortgage, property taxes, and home equity lines of credit. There are no tax breaks with renting.
- Stability: If you take out a fixed-rate mortgage, you’ll know what payments to expect for the life of the loan. Rent, on the other hand, often increases, sometimes even yearly. When you own a home, you also have more control over expenses such as utilities, so you can make choices that encourage efficiency and save money each month.
- Forced savings: Each month, as you pay down your mortgage, you are adding equity. This can be an excellent way to build wealth. In the future, you can sell the home for a profit or borrow against the equity to obtain needed funds. Medical emergencies, college tuition, and home repairs or renovations are common uses for these funds. You cannot build equity on a rental.
- Good health: A mortgage looks good on a credit report and can help you establish a healthy score. As you faithfully pay off the loan, your score can increase. This can prove helpful in obtaining lower insurance rates and qualifying for lower rates on future purchases.
- Final payment: When you buy a home, there will come a day when you no longer have to make a monthly mortgage payment. You will own your property, free and clear. This scenario is much different than paying rent, which will continue for a lifetime.
Are you wondering if a home purchase makes sense for your financial future? I’d be happy to discuss these and other benefits and help you determine if now is a good time for you to pursue homeownership.