Benefits of Owning a Home
For many, owning a home is a dream especially during these hard financial times. Because of financial constraints, many people prefer to rent. Before you consider renting, put in mind that buying a home has numerous financial benefits.
1. Tax deductions
The main benefit of owning a home is probably tax deductions. You can actually reduce your income tax by deducting the interest charged on your home from the gross income. Property taxes are also deducted from your taxable earnings.
2. Financial freedom
Buying a home also means you get to control the amount of money you pay every month. By availing a fixed mortgage, you are certain that your monthly mortgage payment will remain the same 10 years from now. However, rental prices might go up especially during these uncertain economic times.
Even though real estate is unpredictable, sometimes down, sometimes up, over the past few years, there has been a consistent improvement in terms of appreciation. For this reason, many people now consider home investment to be ideal, since it guards against inflation.
4. Home owners enjoy interest deductions on mortgages
Buying a home is a great way to reduce interest deductions on a mortgage. If you have a smaller mortgage balance than the initial market price of the home, loan interest rates are deductible on your income tax returns.
5. Pride of home ownership
This happens to be the main reason why most people desire to buy their own home. You can redecorate and remodel you house to suit your desires and needs. Home ownership provides a sense of security and stability, creating a future investment.
Apart from the many benefits of home ownership, you also need to know some of the drawbacks you may encounter. Generally, one is required to put down a large initial investment, which is pricey to most people.