The emotional and financial stakes are high when purchasing a home, but rewards can be, too. There are intangibles that are tough to measure, such as stability and pride of ownership. However, there are other substantial benefits that are important to consider. When considering purchasing a home, be sure to look for a house that can grow with your family. The financial benefits of home ownership increase over time.
- You don’t own anything when you pay rent. However, every mortgage payment increases your degree of ownership in your home and your equity grows. Home ownership requires buyers to save for a down payment and then save each month by paying down a portion of the mortgage principal. To equal this savings, renters would have to invest an amount equal to a down payment plus the monthly savings. Most renters don’t do that.
- Your costs tend to be more predictable and more stable than renting if they are based on a fixed-rate mortgage.
- You can deduct mortgage interest and property taxes.
- In the long term, buying is cheaper than renting because, over time, the interest portion of your mortgage will eventually be smaller than rent you would have been paying. So, instead of paying off your landlord’s building, you are paying off your own home.
- You can borrow against your equity to pay for major purchases, such as college tuition or remodelling.
- When you sell your home you may qualify for capital gains exclusion depending on your total financial picture, it’s best to reach out to your accountant for full details.
- Your home is indeed your castle to do with as you like. Paint the walls any color you choose and bang nail holes where ever you wish.
- You have greater privacy without any requirements imposed by a landlord.
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