Why You Should Own Your Home
Why Own?
There are a number of benefits to owning your home. Primarily, the home is an investment and asset. Over time, the house’s value will appreciate. Appreciation can accommodate future investing such as a vacation home, education or retirement.
Paying a Mortgage Builds Equity
Equity is the difference between the current market value of your home compared to your mortgage loan balance. According to the amortization schedule, the longer you own your home, the more of your mortgage payment goes to pay the principle versus interest.
Great Tax Benefits
Owning your own home is a great tax shelter. You can deduct all interest paid on your Mortgage Loan on your tax return. Any first home buyer can fully deduct all loan related costs on their taxes.
Equity Loans
The interest rate for home equity loans can also be deductible versus over-priced credit card debt. Again, you can borrow against your home for home improvements, medical bills, starting a business or debt consolidation.
Capital Gains Exclusion
If you end up selling your home, as long as you’ve lived there for two of the past five years you can exclude up to $250,000 if you’re single or $500,000 if you’re married. This exclusion can be used every two years allowing you to be free from taxation on those monies.
Synopsis
You’re making an investment. Working to own your home seems to make the most sense for people looking for a place to live long term. Focusing on paying a loan off early means you won’t have to make such large interest payments. Investing in a home can afford you security, and peace of mind that your investment will appreciate, and you’ll have something you can call your own.
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