7 Reasons to Buy a Home
Considering buying a home? Following are 7 practical reasons to do so, especially if you're currently renting, want to invest in something viable and more.
1. Purchasing a Home is an Investment
When you rent an apartment or a home, every time you pay the rent it’s money that you'll never see again for something you don't own; talk about throwing money away. Most people are surprised to discover that the money they shell out for rent ends up being about the same if not more than a monthly mortgage payment would be (you will need to add in maintenance costs). This reason alone makes buying a home a great idea from a financial standpoint. In addition, as your home's value increases, it becomes an even more worthwhile investment.
2. Low Interest rates
It's a great time to buy a home with the current low interest rates, rental rates going through the roof, home prices below their peaks, employment on the rise. Bottom line, if you're considering buying, now is the time to move forward.
3. Tax Benefits
When you own a home and make monthly mortgage payments, you'll benefit from tax deductions. For instance, you'll be able to deduct the interest from your home loan on federal and in most cases, State taxes. Property taxes also come into play can make a good annual deduction for you. The tax benefits of owning a home will add up over time.
4. Home Equity
Home equity is your share of the home's value. As you repay your mortgage home loan, your home equity increases and over time, more and more goes towards your loan balance, which increases your home equity interest. Basically, owning a home gives you the ability to build equity in the home, turning it into a financially savvy savings plan, especially if you hang onto it for the long term. With home equity, your home will be an important asset when used as collateral for a home equity loan should you need one.
5. Home Equity - Line of Credit
If you own a home and have good credit, you can also apply for a line of credit. A home equity line of credit involves a lender agreeing to lend a maximal amount inside of an agreed period, and the borrower's home is the collateral (similar to a second mortgage). Since a home is usually a person's most valuable asset, most homeowners only use their home equity credit lines for major purchases, including home improvements, medical bills and education. While home equity lines of credit present you with the flexibility to use it at any time (up to 10 years) for any kind of expense, this flexibility typically includes a variable interest rate.
In contrast to rent, fixed mortgage payments don't go up over the years and in fact, housing costs, in many cases, have the potential of going down. Insurance costs and property taxes will increase, but you'll still be in a better position financially if you own vs. rent your home.
7. Freedom and Stability
When you own a home, it can become a creative expression of you and/or your family's personality and you'll benefit from your investment for as long as you own the home. You'll also experience more peace in your personal space. If you live in your community for several years, you and/or your family will have the opportunity to establish friendships and enjoy community activities.