The Benefits of Home Ownership

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Investment and Freedom

Owning a home is quite simply making an investment in your future. It will give you and your family a sense of stability, pride and security. Along with that comes the ability to paint walls, change fixtures and make decisions about your home without a landlord’s prior approval. 

Appreciation

Real estate moves in cycles, sometimes up, sometimes down, yet over time, real estate consistently appreciates. Many people view their home investment as their biggest investment. 

Tax Deductions

  • Mortgage Interest
    Home ownership is an excellent tax shelter and tax rates favor homeowners. If your mortgage balance is smaller than the price of your home, your mortgage interest is fully deductible on your tax return. Interest is generally the largest portion of your mortgage payment.
  • Property Tax
    Real estate property taxes paid for a first home and a vacation home are fully deductible for income tax purposes.
  • Other Tax Benefits
    Homeowners can benefit from exclusion from capital gains tax, as well as other preferential tax treatment when selling their homes.

Equity

With each payment, your principal loan balance decreases, thus building your equity. You can borrow against your home’s equity to obtain a home equity loan. Home equity loan interest is generally much lower than credit card interest and it is deductible. For many home owners, it makes sense to obtain a home equity loan for items such as home improvement, college, medical bills or starting a new business. *always check local laws with your lender

Let the shopping begin.

But first...

  1. Check your Savings
    Most loans will not cover 100% of your purchase price. You will need funds set aside for your earnest money deposit, closing costs and loan down payment. All homes also require upkeep and maintenance. It’s a good idea to have money in savings to cover unexpected home maintenance costs.
  2. Check your Credit
    If your FICO score is below 620, you may have difficulty obtaining a loan and if you do, your interest rate will be much higher than the going rate. Four late payments can be enough to damage your credit. Order your free credit report online and work to fix your credit prior to applying for a loan.
  3. Get Pre-Qualified with a Reputable Lender
    Getting prequalified prior to home shopping is a very important step. Your lender will let you know exactly what you can afford, your estimated payments, and the amount of money you will need to close on a home. Your lender will look at your credit and your debt ratios. They will let you know of any items that need to be addressed now so that your loan process will go smoothly.

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