Benefits of Owning a Home

The old idiom “home is where the heart is” typically appeals to the emotional pull a lot of people have concerning homeownership. After you’ve determined you’re financially secure, you are going to find the advantages of owning a home usually outweighs the risks. If you’re undecided concerning buying a home, read these 10 benefits of owning a home.

1. You Are More in Control Over Your Monthly House Payment

Gone are the days of nervously waiting for the rent increase mail from your property owner. A thirty-year fixed-rate mortgage imparts homeowners with the cornerstone for a persistent monthly payment.

The principal and interest payments on a fixed-rate mortgage remain unchanged for the duration of the loan, and you can lower it by refinancing when rates drop after a while. You can even decide to pay off the loan faster using a shorter term (such as a fifteen-year loan) if you’re “okay” with a higher monthly payment.

2. You Are Going to Build Home Equity with Every Monthly Payment

Every monthly payment is going to build home equity — the variance between the value of the home and the remainder of the loan balance — when you own a home financed using a mortgage. Examining the repayment schedule that came with your closing documents, you can ascertain precisely how much you are paying towards your interest charges and balance of your loan.

Initially, your lender is going to apply the majority of your payment towards interest. However, after a while, you are going to pay down more of your loan balance, building more equity.

You are able to convert your home equity into cash and use it for:

• Paying for improvements that increase your home’s value
• Consolidating high-interest-rate credit card debt
• Starting a business or paying for college
• Buying a vacation home or house to rent

The outcome: Owning a home enables you to build equity for yourself, rather than building equity for your property owner.

3. You Are Able To Convert Your Home Equity To Cash

There are various ways to tap into your home equity without selling it. Lenders don’t limit how you use the cash, so you are able to apply it to different financial goals, including consolidating debt, home improvements or investing in real estate.

There are 4 ways to utilize your home equity:

• HELOC
• Cash-out refinancing.
• Home equity loan.
• Reverse mortgage.

4. Your Home’s Value Can Appreciate After a While

If you look at an infographic of home values since the 1960s, one thing is certain: Home values typically increase the longer you own the home. This is known as “appreciation” and merely means your home’s value is going to likely increase over time.

You can monitor your home’s value through a home value assessor, or by investigating the selling prices of homes in the vicinity. This is going to give you a clearer idea of what your home might be valued at. You could also make home improvements to increase your home’s value, and a great deal of fixer-upper loan programs enable you to roll the expense of those projects into one up-to-date home loan.

5. You Can Utilize Home Equity for Building Wealth

The capability to build equity and own an asset that may appreciate in worth gives homeowners a powerful benefit over renters with regard to building wealth. Actually, the Federal Reserve’s latest Survey of Consumer Finances reveals that the average homeowner net worth through 2022 was $396,200, in comparison with an average net worth of $10,400 for a renter.

6. You Might Qualify for Tax Deductions

One of the significant tax benefits of home ownership is the mortgage interest deduction. As home mortgage interest are tax deductible, which might mean a decreased federal tax bill for you. This benefit is usually the most worthwhile in the initial years of a thirty-year fixed-rate mortgage — when the majority of your monthly payments go toward interest instead of principal.

Mortgage interest charges are not the only housing expenses you are able to deduct. Look at these ancillary tax benefits for homeowners:

• Property taxes.
• Home equity loan interest.

7. You Will Build Credit

Higher credit scores provide homeowners with an added bonus: When mortgage rates drop, homeowners can acquire a lower rate and payment through refinancing, whereas renters are deadlocked with their same monthly rent payment despite their higher credit scores.

Higher credit scores may also help homeowners avoid trouble with their monthly payments.

8. You Have More Independence Over Your Living Space

Be it changing the outside color of the house or tailor making a game room in the attic, purchasing a home gives you the ability to remodel your property however you see fit. You do not have to ask for the landlord’s consent to make changes. Nevertheless, certain restrictions might apply if your property is overseen by a homeowner’s association (HOA).

9. Your Family Could Benefit from the Neighborhood You Live In

Owning a home adds an element of balance to your daily life that renting usually can’t rival. When you are the owner of a home, there are additional social benefits worth remembering.

• You might not move as much
• Your children could do better in school
• You are going to be more prepared for life’s plot twists

10. You May Enjoy Homeownership Health Benefits

Just about sixty-five percent of homeowners described better health physically, as reported by the Greater Cleveland Habitat for Humanity’s ownership impact study. Some of that is because homeowners’ outlook that they are safer living in a neighborhood that has other homeowners that pride themselves in their home and community.

In addition, you’re not under the heel of a landlord to repair a moldy vent, plumbing issue or a HVAC system that broke down in the middle of summer. You could use your home equity to upgrade ineffectual A/C units, swap out drafty windows or make home improvements so that your home is as safe and healthy as can be for you and your family.