• Massey Real Estate

Financial Benefits of Home Ownership

1. Tax Reduction:

a. When owning a house, you get a number of tax breaks which will most likely deduct the interest and the property tax portion of your mortgage. This deduction is particularly useful for offsetting the initial financial blow that comes with purchasing your property. Having a home-ownership can reduce tax and if you ever decide to refinance your home after building sufficient equity in it, you also have the option of taking out a home equity line of credit, which is itself tax deductible.

2. Amass Equity:

a. Every single month that you pay your mortgage you own just a bit more of your home. This is a big benefit over renting, where you’re paying comparable monthly fees without any comparable stakes. The equity in your home builds in two ways and often concurrently:

i. Equity builds as the value of your home increases,

ii. Equity builds as you pay off more of your loan. b. These two factors mean that after the first couple of years every month you pay money toward your loan and you are building up your financial resources for the future. It’s why some people refer to mortgage payments as “forced savings.”

3. More Control over daily housing-related costs:

a. Unless you change the terms of your mortgage, you know the base cost that you’re going to be spending to live in your home every month, both now and in the future. This affords more stability than rent, which is variable and can (and often does) change over time. Control over costs goes even further than that. As a renter, you don’t have a say over whether your landlord supplies you with energy-efficient appliances that can save you hundreds of dollars every year, but you do have to pay the utility bill either way. As a homeowner, you can make better short and long-term financial decisions that are geared specifically toward your own financial goals and abilities.

4. Positive Perks & Benefits:

a. Other benefits of home-ownership may come in handy for you someday. For example, a mortgage is considered “good debt,” and as such, it is likely to increase your credit score, provided you always make your payments on time.It also proves your creditworthiness for other things you may want to consider, like a business loan or a new line of credit. It can even lower your monthly car insurance payments. While perks like these should certainly not be deciding factors when determining whether or not you should purchase a home, they do add up as additional benefits if you choose to opt into the housing market.

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