Homeownership provides families with a sense of emotional and financial stability, and boosts household wealth through equity and appreciation.
By Sandra Kilgore, GRI, ABR, SFR –
In a strong economy, home values usually increase 3-4% per year. Putting money into homeownership instead of renting is like putting money into an investment account versus a no interest checking account.
Homeownership tax deductions also put money in your pocket. The interest and taxes you pay on your mortgage are deductible and reduce the amount of taxes you pay on your income. In other words, Uncle Sam helps you pay your mortgage, yet pays nothing towards your rent. Another benefit of homeownership is amassing equity through making monthly payments.
Homeownership also increases your credit score. A mortgage is considered good debt, and over time will increase your score as long as your payments are made on time. It also establishes credit worthiness for things you would like to purchase. Qualifying for a line of credit or a business loan becomes easier. Homeownership also plays a role in reducing auto insurance payments and qualifying for lower interest rates on other lines of credit.
Homeownership is not the universal panacea for building wealth, however, the financial returns of homeownership are more beneficial than renting. In light of increasing rental rates, homeownership is a bargain compared to rental options. Historically, homeownership has played an important role in building wealth and will continue to be the best option for many in the future.
Please feel free to reach out if you need assistance in planning for your first home purchase.
Sandra Kilgore GRI, ABR, SFR