Deciding to stop renting and buy a home is a major life decision, and not one to be taken lightly. When taking that final step and pursuing home ownership, there are a number of upside you may not have considered previously.
1. Stable Monthly Payments
Most home owners with obtain a fixed rate mortgage which comes with stable monthly payments. One of the wildcards to renting a property is the unknown that comes with the monthly payments, year over year. It’s very plausible that the monthly rent payments for a property can change from year to year upon the renewal of a lease agreement.
The stable monthly payments that come with owning a home can provide some great peace of mind as it makes it easier to create a predictable monthly budget.
2. Home Ownership Gets Easier and Makes You Money Over Time
The first time, buying a house often involves financial strain. You have to come up with a down payment, inspection cost, appraisal fee, home owner insurance and cope with unexpected home ownership costs. You may feel the pinch for a few years. But gradually things get easier.
Also, paying your mortgage over time means you’re building equity each month. This makes real estate one of the most stable investments in any economic climate. A home equity line of credit helps homeowners use the part of their home that’s already paid off to obtain financing for investments such as a renovation, higher-value home, a boat or RV!
Lastly, You can view the equity you build in your home as you make payments every month as a type of saving. Unlike renters, you’ve no choice but to increase your net worth. One study from Harvard University confirms for every $1,000 accumulated by non-homeowners, those who own a home acquire $46,000. Almost 60 percent of the wealth of homeowners is in the form of home equity.
3. Tax Breaks When You Need Them Most
Mortgage interest and certain closing costs are generally tax deductible (check with a pro about your individual situation). You get most of this relief during those early years when you’re paying the bulk of your mortgage interest.
Even better, when you sell your property, you can take up to $250,000 in profit, tax-free ($500,000 for couples filing jointly).
4. Improved Credit Score
Buying a house can improve your credit score, especially if you don’t have a long credit history or many installment accounts. That’s because your mortgage –provided it’s managed well — helps drive up your credit score in three ways:
- Consistent payments show you’re a responsible borrower
- Credit bureaus often give more weight to a mortgage payment history than to revolving accounts like credit cards
- Few landlords report rental payments, so your mortgage gives you an extra account on your credit report
5. Suit Your Tastes, Not Your Landlord’s
You want a menagerie of pets? Does taste in decor run to lurid quantities of gold leaf?Do you like walls painted in violent shades of purple? Or spend your weekends tearing apart engines or woodworking in your shop? No problem. There’s no landlord to tell you those aren’t allowed.
6. Stability & Community Involvement
Owning a home improves stability for many people, which is a nice perk. Since buying a home is a long-term commitment and rather large investment, moving every few years is unlikely.
Many homeowners take huge pride in their community and the relationships that come with being involved in their community. Building relationships with fellow neighbors, local politicians, and local community service employees, such as the local firefighters is something that is difficult to establish without owning a home and being involved in the community.