"Owning a home was once the greatest symbol of the American Dream. And although the American Dream has changed a bit over time, home ownership remains an important part of what it means to be a successful American. But more than just the pride that you can take in having achieved this dream, home ownership gives you a number of other benefits that can ease your daily life and help you prepare for your future. While there are obvious financial benefits to owning your own home (as opposed to renting), there are also other advantages.
Here are some of the advantages of home ownership:
? Tax deductions. There are all sorts of tax deductions which are available to home owners that aren't available for people who rent. This allows you to save money every single year that you're a home owner. These deductions include mortgage interest and property tax deductions. There are also certain tax tricks in the future when you sell your home. ? The money that you spend on a home mortgage goes towards a home that can eventually be yours to sell, rent or will to your kids. The money that you spend on rent just disappears to your landlord's bank account. ? The value of your home will almost undoubtedly increase. There area always ups and downs in the market, but home values across the nation have consistently risen. This means that you'll be your home today and it will be worth more than you paid for it at some date in the future. And looked at from the other side, the home you're renting will also be worth more, so your rent can go up in time. ? You can use your home for future loans. When you have some of your home paid off, you are able to access loan money against the value of the home. This allows you to get lower interest rates than you would receive from private loans (or credit cards) which are all that might be available to you as a renter. Even if you don't get a loan against your home, home ownership improves your credit and makes it easier to get better rates on private loans. ? You own your home so you can make changes to it to really make it yours. When you rent, there are limitations on the changes that you can make at the home. Often, you can't hang shelving or even paint the walls, so your home lacks personality. Home buyers don't have these concerns.
Basically, if you think about all of the things that you dislike about renting a home (or apartment), you'll find that they are problems that disappear when you buy your own home. With home ownership, you're no longer throwing your money away to a landlord who controls everything about the home. You're establishing good credit and making a lasting investment. And the truth is, there still is some value to the old American Dream and you can take pride in home ownership."
Investment Value
Statistics collected by such organizations as the Office of Federal Housing Enterprise Oversight has shown that real estate, though in moves cyclically up and down throughout the years, maintains a consistent trend of appreciating in value over the long run. Homeowners tend to consider their homes their primary investment and a hedge against annual inflation.
Tax Benefits
Tax rates encouraging home ownership make owning a home an excellent tax shelter.
Mortgage Interest Deduction: Take a look at any monthly mortgage statement and you'll see that the largest portion of your monthly payment applies towards mortgage interest. Provided that the balance on your mortgage is less than the purchase price of your house, that mortgage interest you pay is completely tax deductible. According to IRS Publication 530 property taxes on a first home (as well as a vacation home) are also completely deductible from your income taxes.
Capital Gains Exclusion: If you remain in your home for at least 2 out of the previous 5 years, you are eligible to exclude as much as $250,000 (for individuals) and $500,000 (for married couples) of your capital gains profits, without requiring you move up or purchase a replacement home, and without any age restrictions. Every 2 years you're allowed to exclude these thresholds from your taxes, so you could conceivable sell your home every 24 months and pocket all the profits without being taxed on any of it (with certain limitations).
Preferential Treatment: Upon the sale of your home, and so long as you've owned the home for at least a full year, if you make more than the permissible exclusion in profits, the amount is taken as a capital asset and is given preferential tax treatment.
Equity
Every month, a portion of your monthly mortgage payment is applied towards your loan's principal balance, thereby reducing your loan obligation. Based on the rules of amortization , this portion applied to principal increases each and every month. The more principal you pay down, the more equity you have in your home to borrow against. You can then use this for emergencies, renovations and home improvements, and other purchases. Having equity in your home also makes you more creditworthy, in other words: more able to be approved for credit (whether a credit card, a refinance, or a new loan).
Pride
Lastly, not enough can be said about the pride of home ownership. Unlike when you rent your residence, you have a sense of security, stability, and empowerment to do whatever you want in and with your home. You can't put a price on that.
Both Kinan Beck & Daniel Riley are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Kinan Beck has sinced written about articles on various topics from Real Estate, computers and the internet and Real Estate. Kinan Beck is the Broker and co-owner of One Source Realty in Austin Texas. Visit Kinan's Guide, visit his. Kinan Beck's top article generates over 60500 views. to your Favourites.
Daniel Riley has sinced written about articles on various topics from Real Estate, Mortgage and Mortgage Insurance. has been in business since 1979. Whether you are looking to refinance your mortgage, consolidate your debt, improve your home, we c. Daniel Riley's top article generates over 6600 views. to your Favourites.