Unexpected Benefits of Homeownership

By
Mortgage and Lending with Success Mortgage Partners, Inc. NMLS #130562 229758

benefits of homeownership

You already know about the tax benefits of buying a home and the long-term financial advantages created by rising home values and bankable equity. But some of the associated benefits of homeownership might surprise you.

 

1. Pride of ownership

You understand the idea of pride of ownership, but maybe you've never actually felt it. You will once you put those keys in the door for the first time. And this doesn't just apply to first-time homebuyers. If you've worked hard, saved well, spent smart, and are able to now move up to the home of your dreams, you'll undoubtedly feel it, too.

 

"America has a long tradition of homeownership," said the New Jersey Association of REALTORS®. "This country was founded by settlers who braved the wilds, faced the unknown, and claimed a bit of the American countryside for their own. Having a stake in the land upon which we live is rooted in the fabric of the American psyche."

 

2. It's a do-over

So your old house deteriorated into an outdated mess. Or maybe you earned a reputation for being the grumpy neighbor because you threw one too many fits over dog poop on your lawn. Now you've got a clean slate. Your house can be anything you want it to be, and you can be anyone you want to be—even the friendly, helpful neighbor who sets out poop bags, just in case.

 

3. Social benefits

Any move brings new opportunities to make new friends and increase your social interaction. But homeownership can also provoke deeper social benefits.

 

A report from the National Association of REALTORS® found that homeownership positively impacts educational achievement, with homeowners having "a significant effect on their children's success. The decision to stay in school by teenage students is higher for those raised by home-owning parents compared to those in renter households," they said. "Furthermore, daughters of homeowners have a much lower incidence of teenage pregnancy."

 

Potential reasons for this: "Certain behavioral characteristics required of homeowners that get passed onto their children," such as the financial commitment that leads homeowners "to minimize bad behavior by their children and those of their neighbors that can negatively impact the value of homes in their neighborhood;" homeowners assuming "a greater responsibility such as home maintenance and acquiring the financial skills to handle mortgage payments;" and "neighborhood stability."

 

An additional study shows that "homeownership has positive effects on the academic achievement of children (with) significant effects of home environment, neighborhood quality, and residential stability on the reading and math performance of children between the ages of three and twelve."

 

4. Coupons galore

Chances are you've got a laundry list of things you want to do to your new pad. Buying a new house will unleash a cavalcade of junk mail, but in that mess of unwanted refinance offers and insurance information and other nonsense will be all kinds of coupons you can use from big box companies, home décor outlets, window treatment businesses and the like. Go through them carefully and you can fix up your place without spending the equivalent of your down payment.

 

There are also hundreds of dollars worth of coupons from companies like Best Buy, Lowes, and Bed Bath & Beyond available in the change of address form you fill out at the post office or online.

 

5. Credit offers

Once you close escrow, your credit score will get a bump and the credit offers will start rolling in. This is great if you're looking to get a new car, do some home improvement projects on credit, or buy some new furniture. By taking advantage of special offers from Home Depot, Best Buy, or furniture stores like Rooms To Go, you can do some updates and spread out your payments over time without accruing interest—if you qualify. Just make sure to keep track of how much you need to pay monthly to take full advantage of the program.

 

Source: Jaymi Naciri/RealtyTimes.com

Comments (1)

Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

There are cons and pros to everything, in this case: 

Ownership Advantages

  • You can build home equity and wealth
  • Sizable tax deductions possible
  • Your space, your rules (pets welcome)
  • Ability to remodel, expand, tear down
  • Pride of ownership (social status, accomplishment)
  • Potentially better for children, family structure
  • Mortgage payments can improve credit score quickly
  • Ability to borrow against home (HELOC or cash-out refi)
  • No more monthly payments once mortgage paid off
  • Fixed payments (if you choose a fixed mortgage)
  • Mortgages are the cheapest loans available
  • No landlord
  • Can exclude capital gains when you sell (up to $250k per owner $500k for 2 owners)
  • Inflation hedge
  • Can rent out to others
  • Retirement nest egg
  • It’s the American Dream!

Ownership Disadvantages

 

  • Home prices may lose value or buyer overpay for the property
  • Obtaining a mortgage (and finding a home) is a hassle
  • Not everyone qualifies for a mortgage
  • You must pay taxes and homeowners insurance
  • Total housing payment can be more expensive
  • Mortgage payment can rise (if an A.R.M.)
  • Down payment necessary
  • Maintenance costs can be excessive
  • Pricey HOA dues (if applicable)
  • You’re “stuck” in a home (long-term commitment)
  • Increased liability and responsibility
  • Transactional costs of buying and selling
  • Ownership can be stressful!
  • Taxes and insurance generally rise
  • Your home can be damaged or destroyed (and not fully insured)
  • Can be foreclosed upon.
Mar 13, 2017 01:47 PM