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Benefits of Home Ownership
The American Dream is purchasing a home. This involves ensuring the credit is clean, coming up with a down payment, applying for a mortgage and moving everything once the closing is complete.
The reason people are will to go through so much work and trouble is because the benefits to buy a home are more than worth any hassle or headache from the process. Inspiration can be found simple by looking at the homes in a desirable neighborhood.
Benefits of Home Ownership
Many people in their 30’s are now starting to buy houses, even if just as an investment. The benefits of home ownership include the same payment every month. There is no landlord to decide the rent should be increased because the lease expired. This increase can be for any amount the landlord chooses.
When a home is purchased, the most common mortgage will lock in an interest rate for thirty years to ensure the payments will not increase. This eliminates the concerns regarding increases in rent and enables the homeowner to establish a budget based on stable interest and principal payments.
Value in Real Estate
Whether an individual purchases and remains in one home or decides to sell a home to buy another, it represents financial stability and a valuable asset. When a home is purchased, the value appreciates as time passes.
Depending on the market conditions and how long the home is lived in, a home purchased today for $200,000 can increase in value to $250,000, $300,000 or even more. Purchasing a home is one of the best possible investments and provides any children with a financial foundation for their future.
Tax Benefits of Home Ownership
Owning a home provides tax benefits. Accounting costs and property taxes are both tax deductible. The biggest deduction is usually the interest being paid for the mortgage. This means less of the person’s hard earned money is spent paying taxes.
Rent vs Buy
A homeowner has benefits they did not have as a renter. They can do whatever they choose such as knock down a wall, paint or install new carpeting or flooring without consulting with a landlord. Even if the landlord gives permission for renovations, the residents are not the ones who benefit form the work and expense.
A homeowner does not have to ask for permission and reaps the benefits of their work. Many renovations will increase the value of the home. They can choose any color to paint the rooms, add a deck, install new cabinets or add another bathroom. The modifications are strictly decided by the homeowners under their rules.
Don’t Underestimate Additional Costs
There are costs for purchasing real estate such as the down payment and the closing. Once these expenses have been paid, the monthly costs for home ownership are far less than the average rent in most of the United States markets. Buying a home is a much more affordable option than renting. The mortgage rates right now are also low. This means making a purchase now is more economically sound than waiting until an unknown date in the future.
Quality of Construction
The majority of rentals are built using inferior building materials such as shoddy drywall or plywood. This means people can hear what is happening in the units all around them. Condos, townhouses and homes are usually built with higher quality materials including stucco and concrete. This provides a sound barrier for added privacy and peace. A homeowner can add even more privacy by installing a fence or planting trees.
If a homeowner is hit with unexpected expenses such as emergency medical bills, they have an option. When the mortgage is paid consistently, equity will build in the home. This can be used to borrow money. When the loan has a low interest rate it is even easier to obtain financing for not only emergencies but big projects and other expenses. The homeowner is also making an impact on their community.
The longer they remain in the home the larger the impact. This is because taxes benefit the schools, local infrastructure and numerous organizations. A homeowner also has a say in the way things are run in their community.
Real Estate as an Investment
Purchasing a home is an excellent investment in retirement and is often the ultimate nest egg. A house will increase in value. The value is dependent on how long the home has been owned. If the person chooses to remain in the home for thirty years, the value can easily appreciate by 100 percent or more.
As the person ages they have choices available. They can continue living in the home inexpensively if the mortgage has been paid off, the can sell the home and buy something smaller or they can maintain a steady income by renting out the home. This money can be used for recreational activities or to travel.
Owning a Home
The best part of purchasing a home is it belongs only to you. People often have to leave rentals when the lease expires. Living in a home is indefinite. There is nothing more comforting than always having a special place to call home.