Home ownership is something that many individuals strive for. The feeling of owning something that provides both financial and emotional security to you and your family is something that speaks to us all. Owning a home is not always an easy task, however, and many are faced with roadblocks along the way.
There are many paths to owning a home. A traditional mortgage is often the most well-known path, but is only available if your finances and credit allow. There are also alternatives to a traditional mortgage in the form of rent-to-own or lease purchase agreements which allow you to live in the home before you buy it at a later date. This can give you time to ramp up your credit score and put together more savings before taking on a loan and making the purchase.
Becoming aware of the financial benefits of homeownership, is critical to understanding why homeownership is more preferable than renting.
Equity: Equity is the difference in what is owed to the value of an item. So it’s actually more ideal to look at a home purchase as a long term savings account instead of expenditure. Remember, with every payment made you’re saving money up for the future. In addition to the money you’re saving up, you’re also building a form of interest called value. As time goes by the value of your home will increase saving you even more money in the long run.
Tax Deductions: In most cases, the interest you’ve paid on a mortgage, along with property taxes are tax deductible. Since most lenders front load interest, you’ll enjoy significant tax reductions for at least the first five years of your loan.
Builds Credit: Having a mortgage in good standing will show other lenders that you’re creditworthy. This can go a long way to securing low interest loans for vehicles or home improvements.
There is something intrinsic about owning your own space that appeals to our nature. The space where we live is an integral part of who we are. Looking back on your life I bet you can vividly remember your parent’s home or if you moved around as child you may have memories of several homes. A home gives us with the sense of security we need. It’s the place we go to reflect, to lick our wounds, to grow. There truly are not many things in this world that can provide that kind of feeling of security and comfort.