Homeownership is a major goal in life that many seek to achieve. Purchasing, rather than renting, offers a whole array of benefits that are available to only those who choose to receive the keys. If done correctly, a home purchase will be an incubator of wealth over time. Here are just a few reasons why purchasing a home is one of the most important decisions you will ever make.
1. Tax benefits. The U.S. Tax Code allows you deduct the interest you pay on your mortgage, your property taxes, and some of the costs involved in buying a home. When tax time comes around in April this is one solid deduction to take advantage of.
2. Appreciation. Historically, real estate has had a long-term, stable growth in value. In fact, median single-family existing-home sale prices have increased on average 5.2 percent each year from 1972 through 2014, according to the National Association of Realtors. The recent housing crisis caused some to question the long-term value of real estate. However, in the past 10 years, which includes quite a few very bad years for housing, values are still up 7.0 percent on a cumulative basis. Here in Ridgecrest, values are slowing rising, but not as quick as the national average.
3. Equity. Money paid for rent to your landlord is money that you will never see again. However, mortgage payments allow one to build equity ownership interest in a home. As values rise so does the equity. It’s like tucking money away in a long-term account that gradually rises in good times, and eventually recovers through the rough economic times.
4. Savings. Building equity in your primary home is a ready-made savings plan. When the home sells, sellers can generally take up to $250,000, and $500,000 for a married couple, as a gain without owing any federal income tax. This is a huge wealth builder and another great advantage.
5. Predictability. Unlike rent, your fixed-rate mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that as values increase property taxes may increase as well.
6. Freedom. Remember, the home is now yours! You can decorate it any way you want and choose the types of upgrades and amenities that appeal to your lifestyle.
7. Stability. Remaining in one neighborhood for several years allows you and your family time to build long-lasting relationships with you neighbors. It also offers children the benefit of educational and social continuity.
Need any more reasons to purchase? Give me a call, Clint Freeman at (760) 382-1082, and let’s get the conversation going!