Owning a home is one of life’s goals for many. But is buying a home necessarily a good thing? It doesn’t seem so, considering the rising interest rates for mortgages, home insurance, and other costs associated with maintaining a house. Renting has always been cheaper and more convenient. Then again, you should ask yourself if you are measuring the value of owning a home properly. Here are several benefits of owning a home to help you decide:
A Home is a Valuable Asset
The costs of buying a home are usually cancelled out by the value of a house, which usually only goes up over time. A home is one of the best assets the average worker can have. Your parents knew the value of owning a home, and their parents before that did too. If the 2009 housing market crash has shaken your confidence in property values, it’s time to un-shake them. You can use a house as collateral to take out loans for investments, business, and other needs. Also, a home can be a way to generate passive income by renting out rooms. Homes have immeasurable sentimental value, and their financial values aren’t that bad, either.
Homes Give Tax Deduction Benefits
There are a number of tax write offs you can get if you own a home. These may vary depending on the state you live in. In general, all homeowners can deduct the interest of the mortgage from taxes. Interest payments make a hefty portion of a mortgage, so these deductions are not small. Property taxes are also deductible depending on your current income and net worth. Also, some states allow tax deductions from closing costs of buying a home for the first time.
If you own a home, you don’t have to worry about sudden evictions based on a landlord’s whims. When you rent, you are vulnerable to losing shelter with a quick notice. Most renters don’t expect to stay at one place for more than a few years. When you own a home, you can be assured that there will always be a roof over your head.
Equity is basically the amount of money you can sell your home for in the housing market. Equity is based on your mortgage. The lesser the mortgage balance, the higher the equity will be. When you pay those mortgage bills every month, your home equity grows. That means your overall wealth improves as the years roll by. You can leverage this equity to obtain loans or to invest.
Homeownership is Cheaper in the Long Run
Now, if you assess how much you have to pay each month in rent versus mortgage, the rent will win. However, remember that the mortgage reduces every month. Rent, on the other hand, only increases with inflation, rising property prices, and other economic factors. So, if you decide to rent for a decade or longer, you are losing money. If you buy a home, you will be much wealthier in two or three decades.
Renting is all right as long as you are doing it temporarily, or in addition to having primary residence. Homeownership is definitely the better option considering the stability and the financial benefits a permanent home provides.