Financial Benefits to Home Ownership

Owning a home can be very rewarding. You get to make decisions about how you want your property to look and be utilized, instead of having a landlord dictate the terms. On top of that, there are many financial benefits associated with owning a home. Here are five great reasons why buying a home may be beneficial to you financially.

Mortgage Deductions

If you own your home, the mortgage interest deduction can help save you money on your taxes. The purpose of this incentive is to encourage homeownership. While investment properties may not be eligible for this deduction, in 2020 taxpayers could deduct mortgage interest on the first $750,000 of indebtedness, according to the irs.gov website. While it’s advisable to seek the advice of your tax preparation agent when claiming this deduction and determining eligibility, it’s clear to see this has the potential to be a significant savings.

Equity

You may build equity in your own property. With each payment, you’re potentially investing in your future, giving you the option to buy something that is maybe out of reach at the current time. As each month passes by, your ownership of your home increases, and you may eventually find yourself with equity in your property. In some cases, this could be used as collateral for loans and credit cards, should the need arise to borrow money or require additional funding when emergencies arise.

Saving Money Over Renting

It’s possible that owning a home over renting one can help save money each month. The monthly cost to rent an apartment in Lakeville (via Apartments.com) starts at $1400 and up, depending on amenities and location. This contrasts homeownership costs which can range $1200-1350 per month on average as of April 2021. As you can see, not only is your monthly payment less, but you’re also potentially building equity. Keep in mind there are other costs of home ownership that you may not be responsible for when you are a renter.

Consistency and Predictability

Home ownership gives the homeowner a layer of predictability for monthly payments. You know what your payments are going to be each month, and it’s less likely that you’ll get hit with an unexpectedly high rent hike. While some utilities may fluctuate, provided additional home loans aren’t taken, your mortgage payment will be pretty consistent over the lifetime of your loan.

Investment Opportunity

Home ownership continues to be an asset that appreciates. Home ownership can be a great way for families and individuals who are looking for more security in their finances to invest, or those that simply want an investment opportunity. The value of the property will generally increase over time because it’s not likely there is going to be a sudden decrease in demand for housing. With many other investments such as stocks and bonds, the risk factors may fluctuate, but owning a home has proven over time to be a way to gain and ultimately transfer wealth.

In conclusion, home-ownership can be financially beneficial. From tax savings, to consistency in payments, home ownership continues to be an asset that appreciates, and owning a home has proven over time to be a way for people to gain wealth. There are also many other potential benefits such as providing security in finances or being able to invest with less risk than stocks and bonds. Owning a property may not always deliver financial freedom but it does provide you with opportunities!

*This article is for informational purposes only and is not intended to provide investment, tax, or legal advice.

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