If you’re ready to start feeling the benefits of stability, savings, and predictability that come with owning a home, let’s connect to determine if buying sooner rather than later is right for you.
In today’s housing market, there are clear financial benefits to owning a home: increasing equity, the chance to build your net worth, and home values, to name a few. If you’re a renter, it’s never too early to think about how homeownership can propel you toward a healthier future. Here’s a dive into three often-overlooked financial benefits of homeownership and how preparing for them now can steer you in the direction of greater financial security and savings.
You Won’t Always Have a Monthly Housing PaymentPersonal finance advisor Dave Ramsey explains:
“Every payment brings you closer to owning the house. When you pay your rent, that money is lost. But when you pay your mortgage, you work toward full ownership.”
As a homeowner, you can eventually eliminate the monthly payment you make on your house. That’s a huge win and a significant factor in how homeownership can drive stability and savings in your life. As soon as you buy a home, your monthly housing costs begin to work for you as forced savings in the form of equity. When you build equity and grow your net worth, you can continue to reinvest those savings into your future, maybe even by buying that next dream home. The possibilities are truly endless.
Homeownership is a Tax Break
People who have never owned a home don’t always think about the tax advantages of homeownership. The same article states:
“You have tax advantages. Many of the costs of owning a home—like property taxes—are tax-deductible. And if you’re paying off a mortgage, you’ll get to count your mortgage interest as a deduction when you file your tax return.”
Whether you’re living in your first home or your 5th, it’s a substantial financial advantage to have some tax relief tied to the interest you pay each year. It’s one thing you don’t get when you’re renting. Be sure to work with a tax professional to get the best possible benefits on your annual return.
Monthly Housing Costs Are Predictable
A third benefit is that monthly costs become more predictable with homeownership, something that doesn’t happen if you’re renting. Ramsey also notes:
“Rent rates will go up. Even if you found a killer deal in a hot area, inflation, competition, and rising property values will cause your rent to go up year after year.”
With a mortgage, you can keep your monthly housing costs relatively steady and predictable. Your monthly expenses are based on a fixed-rate mortgage, which allows you to budget your finances over a more extended time. Rental prices have been skyrocketing since 2012, and with today’s low mortgage rates, it’s a great time to get more for your money when purchasing a home. If you want to lock in your monthly payment at a low rate and have a solid understanding of what you’re going to spend in your mortgage payment each month, buying a home may be your best bet.