If you are considering buying a home, you may be wondering whether it is the right thing to do. Some people receive conflicting advice from well-meaning family and friends, and there are a lot of pros and cons to weigh.
A home is potentially the biggest purchase you will ever make in your lifetime, so it is normal to have some reservations. Although there are a few benefits that come with renting, there are several compelling reasons that investing in a home can be a good idea.
The Benefits of Homeownership
Here is a look at some of the reasons you might want to consider buying a home.
One big reason that many people choose to buy a home is for the equity. When you pay money for rent, it is money that you will never see again. However, making a mortgage payment enables you to build equity ownership interest in the home that you can potentially get back should you end up selling it in the future.
Every month, part of your payment is applied to the principal balance of your loan, and more of the payment is applied to the principal versus the interest as the years go by. Therefore, the longer you remain in your home, the more equity you will build with each payment you make.
In addition, home values tend to rise over the years, which means that buying a house can prove to be a good investment.
2. Tax Benefits
Many tax rates in the U.S. favor homeowners. For example, if your mortgage balance is smaller than your home’s price, your mortgage interest will be fully deductible on your tax return. You may also be able to deduct your property taxes and some of the costs involved in the purchase of your home.
Some homeowners can enjoy capital gains exclusions when selling their home as long as they lived in it for two of the past five years.
Individuals can exclude as much as $250,000, and married couples can exclude as much as $500,000 in profit from capital gains when selling their home without needing to purchase a replacement home.
One of the biggest frustrations many renters have is their inability to alter the property to suit their tastes. Many times, painting the walls or changing the floors is simply not allowed.
Even in cases where a landlord gives approval for such changes, the renter will be spending their own money to improve someone else’s property, which is far from ideal.
However, when you own your own home, it is yours to decorate the way you choose. You are free to decide what upgrades and amenities you want to add, and some of them may even increase the value of your home, which means you will receive a return on this investment should you choose to sell the house at a later date.
4. More Space
Oftentimes, owning a home gives you more space than you might get with a rental as many rental properties tend to be apartments. Many homes come with a nice outdoor space that you can use as you wish, whether you want space for your children to play, you wish to install a swimming pool, or you would like to start a garden.
This is particularly important for families as children need to spend time outdoors for their health and well-being. Pet owners can also benefit from having more yard space and a bigger overall living space in general; many rentals do not allow pets at all.
5. Predictability and Stability
Many people appreciate the predictability that comes from homeownership. Unlike rent, which can rise if your landlord chooses, fixed rate mortgage payments will not change over the years. This means that your housing costs might actually go down as you own your home longer.
There is also the benefit of stability that comes with owning a home. First, you will not have to worry that your landlord will raise your rent to a price you cannot afford, forcing you to seek another rental.
Likewise, the landlord could choose to sell the property or ask you to move out at the end of your contract for whatever reason. When you own a home, you will not have to move out as long as you can afford your mortgage payments.
Moreover, owning a home in a particular neighborhood in the long term gives your family time to build long-lasting relationships within the neighborhood and the community at large. For children, there are also the benefits of social and educational continuity to enjoy.
Reach Out To The Mortgage Broker Team At MyLendingPal
If you are interested in learning more about the benefits of homeownership or have decided you would like to move forward in buying the home of your dreams, get in touch with the mortgage brokers at MyLendingPal to find out about the financing options that are available to you.