REASONS TO BUY A HOME
- Pride of ownership is a key reason for wanting your own home. You get the opportunity to decorate it to your own taste and enjoy all of the benefits while making a great investment!
- Real estate over time has been considered a good investment because most of it has appreciated. In the long run, your home can be a wonderful source of financial security for retirement or future expenses. The equity that you build from owning a home can be used to cover college tuition, medical bills, or even to start your own business. Many times, the largest investment a person owns is their home.
- Qualified mortgage interest and home equity loans are deductible for U.S. Income Tax purposes.
- Property taxes on a first or second home are also deductible for U.S. Income Tax purposes.
- A homeowner can exclude up to $500,000 of capital gain if married, filling jointly up to $250,000 if single or filing separately for homes that have been the taxpayer's principal residence for the previous two years (two out of the past five years, making it possible to rent for a few years before selling).
- Preferential tax treatment on gains that have been made from capital assets held more than one year are permitted by IRS. This is especially important for homeowners with gains in excess of the allowable exclusion.
- Mortgage payments include the interest for the time that the money has been used and principal to retire the debt over a period of time. Each month part of the payment is for principal accumulation. This allows you to gradually pay off your home loan while applying part of your monthly bill to the actual loan amount and part to the accumulated interest.
There is never the wrong time to buy the right home. All you need to do in the short run is find a good buy, and make sure you have the financial ability to hold on to it for the long run.
See part 8 in the next installment of Dana's Complete Guide to Home Buying
Comments(0)