Advantages of Home Ownership

The choice to buy or rent has always been one of the important decisions an adult faces. To some it may seem that buying a home is more costly, a down payment is needed. It takes more time and the house is solely your responsibility. However, if you can afford to buy a house, and you don't plan to move in the next 2 years, there are great advantages available to you.

Owning a house is financially the better choice. There are 3 significant tax breaks you get with owning your home.
1. You get to claim a deduction for your real estate property taxes
2. You get to claim a deduction for the interest paid on the mortgage every year, which is the majority of your payments the first 5 years.
3. You get to claim a deduction for depreciation

The better benefit is the equity you will build as a homeowner. Every year you pay down the mortgage. The money you would have spent on rent is going into your house and you owe less every year. Keep in mind that real estate appreciates an average of 5% per year in most states. So, a house you bought for 100,000 this year potentially will be worth and additional $27,628 in 5 years. Add to that the amount you have paid down on your mortgage (about $5,700), and you are ahead $33,328! If you want to increase your equity quicker, you can buy a home that needs cosmetic improvements like paint and landscaping. Minor improvements could significantly increase the value of a home over a relatively short period of time with a small investment.

If you are going to be paying more than $1,000 per month for rent, it makes sense to look into purchasing a home. Call a mortgage broker to find out what loan programs are available and to find out the purchase amount you qualify for and see what the monthly payments would be. You owe it to yourself and your financial future to build $33,000 in equity over the next 5 years!