We’ve all heard it before: buying a home is part of the American dream. And, while it is initially more expensive to own a home than rent, there are multiple benefits of buying a home that you can’t get from renting. Read on to learn four ways that homeownership can help you create a secure financial future and build wealth over time.
1. Buying a Home is a Good Investment.
Rental costs are creeping up. And while home prices are also increasing, when you stay long enough, the value of your property will traditionally go up as well. When you are ready to move, you’re likely to get a substantial return on your investment. When interest rates are low, it might be a good time to purchase a home.
2. Owning a Home May Help with Your Budget.
When you’re a renter, there are many things out of your control. Landlords can (and do) raise rents. In most cases, you can’t guarantee your rent will remain stable for the long term. Owning a home, however, means you know your mortgage payment – on a fixed rate term of up to 30 years – and can plan accordingly. And, bonus: after you pay off your mortgage the home is yours!
3. The Tax Benefits are Real.
Have you heard of mortgage interest? In the early years of your mortgage, interest is often a large part of your mortgage payment each month. Deducting the amount of your mortgage interest payments from your taxes is the chief tax benefit of owning a home. And, if you itemize your deductions, you can also deduct property tax payments and other expenses from your federal income tax.
4. Your Nest Egg Continues to Grow
Every time you make a mortgage payment, you’re one step closer to paying off your loan while building equity at the same time. What’s more, as your home increases in value, so does the amount of equity you have at your disposal. When necessary, you may be able to borrow against that value – to make home improvements or for unexpected medical or education expenses.
For some, the thought of buying a home or going through the mortgage process can seem overwhelming. That’s why it’s important to develop a relationship with a trusted loan expert who can provide sound advice tailored to your financial situation. The FirstBank Mortgage team is here to help. Please contact us to learn more.