Owning a home has great financial benefits, but many people continue to rent. Owning a home has been part of the American Dream for many years! Buying a home makes sense in the long term and many rent as a short term option. However for many, buying will save you money!
Here are five top financial benefits to owning a home:
- Homeownership is a form of forced savings.
- Homeownership provides tax savings – some of that may change with the new tax laws but there should still be savings.
- Homeownership allows you to lock in your monthly housing cost. Your taxes and insurance may change, but the principal and interest payment won’t!
- Buying a home is cheaper than renting.
- No other investment allows you to live inside it!
There are reports that show a homeowners net worth is higher than a renters net worth. For many it’s a case of equity – as you pay your mortgage down, you are gaining equity every month. As your property value increases, you gain more equity. This is money that you will see when you sell your home. It could allow you to refinance and get cash out, maybe take out a 2nd mortgage or just use the money when you sell to buy a new home.
Some will say that renting eliminates the cost of taxes and home repairs, but every renter must realize that those costs are included in their rent. If the property taxes go up, chances are your rent payment will go up. If there are major repairs to the home, more than likely you will see your rent go up – it may not happen immediately, but when your lease is renewed, you may see the increase.
For most people, owning a home has always been a better option than renting. If you know you are in an area for a short time, renting will probably make more sense, but once you move, you may want to look into buying. Home prices are still expected to increase, making it easier to gain more equity.
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants, Inc., An Equal Housing Lender, NMLS#150953 – Email – Website
