The thought of owning your own home is exciting. Owning a home is a big investment and it can be challenging to decide whether it’s right for you. Here are the top four reasons to own a home instead of rent.
- Pay the Same Amount Every Month
When you rent, the price can go up every year or as you renew your lease agreement. With a home mortgage, you’ll pay the same rate every month. You’ll know exactly how much you need and it’ll make it easier to create a predictable monthly budget.
The only potential change is the property taxes. But they rarely change much from year to year. Some buyers have found they pay less for their monthly mortgage than they do for rent plus utilities.
- Build Equity
In real estate, equity is the estimated market value of a home that subtracts the amount of mortgage left to pay and any other liens against the property. The longer you live in your home, the more you’ll be able to pay the principal balance of any liens. Often, the equity grows as the balance of any liens against the property shrinks while the value of the property increases.
- Gain Tax Benefits
There are many tax benefits to buying a home. You’ll be able to deduct interest on your mortgage. Any interest you pay as part of the closing costs will be deductible. This information is usually found on the settlement sheet. Just before tax time rolls around, your lender will send you IRS Form 1098. It’ll show the money you’ve paid in interest on your loan for the year.
You’ll also deduct private mortgage insurance (PMI) if you have it. Property taxes are also deducted. This alone saves you thousands of dollars. First-time buyers may have additional deductions, so ask about that. And finally, if anyone works from home, you can deduct the home office space.
- Make Changes to Your Home
You get to choose the floor plan that fits what you have in mind. You’ll have the ability to change the colors of any room at any time. When you own your own home, you can make any changes you want. You’re not beholden to the landlord’s requirements. If you buy your home before it’s built, you can ensure that the design is the way you want it.
Owning a home offers so many more benefits besides these four reasons. It can also build your credit score and it’s one of the best investments you can make with a good chance of a huge return on investment. And home is more than just a place to hang your hat and get a good night’s sleep. It’ll be a place where you’ll make many memories.
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