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Buying a home is one of the most rewarding and amazing things that a person can experience in life. There is a lot of responsibility to owning a home, but with it comes a lot of rewards. Many people wonder what the real advantages of home ownership really are. Here are some concrete reasons why home ownership might be the right thing for you.
Buying a Home is an Investment
Buying a house is an investment and a large one at that. The more that you put into it correctly, the more that you can get from it down the road. Just like any investment, the more that you care for it, invest back into it and utilize options that increase it, the better off you will be down the road.
Buying a Home Helps You Build Equity
Do you know what the equity in your home is really worth? Do you even know how to calculate the equity in your home? It is very simple to determine. Simply take the total value of your home and subtract anything that you owe against it (including unpaid improvements, such as what you owe contractors to remodel your bathroom, etc.). What you have left over is the equity of the home. What this means is the amount that is already in your pocket that you own without any debts or other people to be paid back. So, for example, if your house is valued at $150,000 and you owe $120,000 to the bank and $5,000 to contractors, the current equity value of your home is $25,000.
There are a couple of ways that you can build up your home equity. One way of increasing the equity of your home is with the fluctuation of the housing market. As the prices of homes continue to rise, your home will increase in value even though you won’t owe more on it. This is automatic equity and while it does fluctuate from year to year, any increase is free equity in your pocket.
The other way to make equity in your home is to make your monthly payments towards the loan on the property. Each payment that you make reduces the amount you owe back to your lender or creditor and also helps to put equity into your home. A portion of each payment that you make from your monthly payments goes towards the interest on the loan, while the rest pays off what you owe and the amount you pay off from what you owe is considered equity back into the home.
Buying a Home Gives Back Significant Tax Benefits
Most people don’t know that their tax situation can be benefited by buying a home. Owning real estate can reduce what you owe for income taxes each year. Also, the new deductions that you can include in your taxes can net you some excellent figures.
Mortgage interest and property taxes are deductibles that you can write off during tax season. This applies for both your federal and state taxes in most states. For most, closing costs, loan fees, and much more can also be deducted from your taxes. If you file your taxes after buying a house in your first year, you may also be able to write off other costs, such as appraisal fees and inspection costs as well as any repairs that you make within a certain time frame of purchasing the home. The greatest part to these benefits comes in your first couple of years of home ownership since these deductions can lead to a significant amount being put back into the house payments, your bank account or your pocket.
Your Home Helps Build Your Credit
Getting a home can be hard without good credit, but once you do get a home, your credit score and credit history can really be helped! By purchasing a home and maintaining good records of payment being made on time, you demonstrate to creditors that you a low borrow risk and that you are in good financial standing with other lenders. This opens up more options for loans, credits, and helps you maintain good credit history for future home purchases.
In addition, the more on time payments that you make (especially if you are able to pay a little more than the minimum payment) the more that you boost your credit score and credit ratings. A solid and strong credit history helps you in the future for any kind of loan.
You’re Free to Be Creative in Your Space
By this, we mean that you are able to create any kind of living environment that you want, free from the rules and regulations of parents, roommates, and landlords. You can remodel as you wish (within city and or town ordinances), you can have pets, you can make changes to the paint and floor styles, and so much more. If you want to do with polka dot wallpaper, no one is going to stop you now.
You Pay for Your Life, Not Someone Else’s
When owning your own home, you get out of the rat race of paying someone else’s mortgage with your rent payment. If you are going to spend a substantial amount of money on housing each month, it is better in the long term to spend that money on your own home than on a rented house that you don’t own. Also, by paying for your own home, you reap all the benefits listed above rather than giving them to a landlord.
So what do you think? Is home buying and owning right for you?
Our team of licensed Maryland Realtors and Mortgage Brokers here at Buy a New Home are here to assist you in any way possible. Fill out the contact information form or give us a call at 443-605-5977 if you would like further assistance.
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