How Owning a Home Affects Your Wealth
Owning a home should significantly increase your financial net worth, which is the difference between your assets, including bank accounts, retirement accounts, stocks, bonds and mutual funds, and your liabilities or debts. You might think that it's counterintuitive: having a mortgage, or a debt, should not make you more financially solvent. But it does. In general, any home you own will increase in value, or appreciate, over the decades while you pay down the mortgage debt you used to buy the home.
Even if you don't notice much appreciation in your home, due to forced savings caused by paying down the balance on your mortgage, you will still significantly increase your net worth. In other words, the more you pay down your mortgage, the less debt you have, and the more equity you have in your house. Equity is the difference between the market value of a home and the outstanding loan on a home.
Many retirees can tell you that owning a home free and clear of a mortgage is a joy in and of itself. Not only does owning a home save you money on inflation, the equity you gain by owning a home provides you with a supplement to other sources of retirement income.
<!--[if !supportLineBreakNewLine]-->
For more information contact Stephanie Antes 612.750.6554 or
RickMcDeid 763.443.6680 or Visit us on the web at: www.OurHome4You.com
Comments (0)Subscribe to CommentsComment