Prime Financial Advantages of Home Ownership

Home ownership is a common American dream, and while some people can’t afford to or actively choose not to pursue it, those who buy into the housing market often see major financial benefits.

Purchasing a home is one of the most significant financial decisions you can make and simply getting to that point requires a certain degree of financial success. But among those who take on the big task of home ownership, many see financial benefits that far outweigh their initial investment, especially during tax season.

Strong Financial Future

Owning a home is one of the basic foundations of accumulating wealth as we age, if you make a smart purchase and don’t try to live beyond your means.

Asset-wealth is one of the strongest indicators of strong future financial stability.  Putting money into home ownership versus a rental is comparable to putting money into an investment account versus a no-interest checking account. If you are not investing for the future, your money would always only be as valuable as it is in the present moment rather than allowing it to increase over time.

Tax Deductions

Homeownership permits many tax breaks. One of the top deductions is for the interest and property tax portion of the mortgage, which is especially helpful to balance out the hefty initial purchase costs of the property, since in the first years of owning the home you’re basically just paying mortgage interest, rather than the principal. The first year of the purchase you’re also allowed to write off mortgage points on your loan, which can lead to significant savings depending on how many points you claim. If you eventually decided to refinance after building sufficient equity, you may also opt to take out a home equity line of credit, which is tax deductible.

Build Equity

Every single month that you pay your mortgage you own just a bit more of your home, as opposed to renting where you’re paying comparable monthly fees without any comparable stakes. Home equity builds as the value of your home increases, and as you pay off more of your loan. After the first couple of years, each month you pay money toward your loan you’re building your future financial resources.

You can even choose to build equity faster and pay off debt quicker from financing with a shorter-term loan, paying more than you owe every month, or increasing your property value with home improvements and a hyper focus on routine maintenance.

More Control

Homeownership allows you to be well aware of the base cost that you’re going to be spending to live in your home every month, both now and in the future. This offers greater stability than renting, which can and often does fluctuate over time. Plus, renting doesn’t allow a say over other financial aspects, such as whether you’re equipped with energy-efficient appliances that can save you hundreds of dollars every year, but you are responsible for the utility bill either way.

Homeowners can make short and long-term financial decisions that are geared specifically toward their unique financial goals and abilities.

Additional Benefits

If you always make your mortgage payments on time it can increase your credit score and proves your credit-worthiness for other things you may want to consider, like a business loan or a new line of credit. It may even lower your monthly car insurance payments.

About Barnes Insurance Agency

At Barnes Insurance Agency, we specialize in vacation home rental insurance to ensure the protection of your property and assets. We strive to offer customizable solutions to meet your specific needs. For more information, contact us today at (866) 733-5424.

Please follow and like us:

Comments

comments

This entry was posted in Home Insurance and tagged , , . Bookmark the permalink. Follow any comments here with the RSS feed for this post. Both comments and trackbacks are currently closed.
Follow by Email
LinkedIn
Share
Google My Business
RSS