Home buying perks explored
Are you thinking of buying a home? Do you sometimes find yourself adrift at sea oscillating between that dream and keeping your roommate forever because just maybe renting is ultimately easier than buying? Think again. What are the benefits of buying a home, you ask? Immediate membership perks include:
Pride of ownership
Privacy
Stability
Mortgage deduction on taxes
An opportunity to build wealth and equity
If any of this sounds enticing, you’re in the right place. The “rent vs. buy” debate most twenty and thirty-somethings have during their Caesar -infused brunches is inevitable. If you haven’t been there, the day is fast approaching. So, in between nibbling on some pickled olives and dreading the return to your roommate-infested apartment, consider the following perks of packing up and moving into a place that’s yours and yours alone.
Buying a home is an opportunity to build equity.
It’s Yours.
Ah, freedom. Imagine a place where the only person to get upset with for not doing the dishes is yourself. Not bad, right? Plus, you’re your own landlord. That means you can have any pet you want and you can finally express yourself without holding anything back. If keeping holiday lights up year round is your thing, go forth. You can even rent the spare room out to a friend to cover mortgage payments.
The Investment Advantages
A house is an investment because homes often increase in value over time. If you live in your home for long enough, you very well could see a sizeable return on your investment. A car, by contrast is not likely to be a great investment. They need constant upkeep and as soon as they’re off the assembly line their value typically begins to depreciate.
Tax credits may offset some of the cost of owning a home too. Your mortgage interest and property tax payments may be deducted. In the beginning of repaying a mortgage, when the interest is at its highest, tax deductions may even put money back in your pocket.
When you pay off your home, it’s yours. Once this happens, you enter an era free of mortgage or rent payments. If the home appreciates in value, your investment in the home appreciates as well and that money is all yours.
Building Equity
Potential home buyer, meet equity. Equity, meet home buyer. Now, equity, what are you exactly?
Equity is the market value of a homeowner’s unencumbered interest in their real property.
With each mortgage payment you make, a portion goes toward reducing your loan amount, which increases your equity. Essentially, paying your mortgage down could be a form of savings because each payment increases your home equity (assuming the house appreciates in value). In the future, you can tap into this money. As your home increases in value, so does your equity. If you’re paying rent on an apartment, that money is just leaving your bank account and going into someone else’s, without any benefit to you.
Once you’re ready to buy a home, iron out the logistical and financial details before you begin looking for one. Buying a home is probably the biggest purchase you’ll ever make so don’t put the cart before the horse. In the beginning, focus on determining how much you can afford and on getting pre-approved for a mortgage. This means that once you begin looking for the home you’ve always wanted, your offer will be as good as cash. From there on out, you’re in the clear to becoming your own landlord. Now, who’s the boss?