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Writer's pictureGeorge Nickels

7 Reasons Why You Should Own a Home

We all should know by now that there are a bunch of benefits that come with owning a home, because if there weren’t, then please explain to me why there are over 79 million homeowners in the United States??? The goal of this blog is to educate you on all of the incredible benefits that you get from owning a home, so that one day, you can become a homeowner!

1. Price Appreciation
Now what better place to begin than with price appreciation? As most of you may know, home prices across the country have skyrocketed in the past year…18.6% to be exact. Now I would never recommend for you to buy a home with the expectation that it’s going to appreciate by this much every year…BUT you can expect your home to appreciate on average 3.5% every year.
To put into perspective how much money you could be sitting on by the time you pay off your mortgage, let’s say that you bought your home for $100,000. If the price of your home appreciates 3.5% every year for the next 30 years, then the price of your home will be around $285,000 by the time you pay off your mortgage!

2. Tax Benefits
If there’s one thing that Uncle Sam does right, it’s providing people with a bunch of tax benefits for owning a home. Here’s a list of some of the best tax benefits that come with owning a home…

Tax Deductions: As a homeowner, you get to deduct both mortgage interest and property taxes from your annual income taxes.

Capital Gains: Remember when I said that the price of your home appreciates over time? Well, there’s this term called “capital gains”, which is the difference between the price you paid and the price you sold your home for. Capital gains are treated as taxable income. However, homeowners are excluded from having to pay taxes on their capital gains of up to $500,000.

3. Credit Builder
Having a mortgage can positively impact your credit score if you’re making your payments on time. Also, having a mortgage helps you diversify the different types of credit you have and increases the length of your credit history, which both have a positive impact on your credit score.
I know what I’m about to say is common sense, but I want to emphasize the importance of making your payments on time because having a mortgage can negatively impact your credit score just as much as it can positively impact it.

4. Borrowing Power
As you build up more equity in your home through price appreciation, you can essentially use the equity in your home as a credit card by borrowing from it through what’s called a “home equity line of credit”. To spare myself from having to type home equity line of credit multiple times, I’m going to use the acronym for it instead, which is “HELOC”. You can use a HELOC for anything you want! However, people commonly use a HELOC for long-term, ongoing expenses such as home renovations, medical bills, and college tuition.

But what the investor in me loves most about a HELOC is that you can use it to buy another home, which you can then use as an investment!

5. Forced Savings Account
The reason that many people in the real estate industry refer to a mortgage as a “forced savings account” is because every month you pay your mortgage, a portion of that goes towards the principal, which is the money that you borrowed from the lender to buy your home.

People think they can discipline themselves to save the additional income that they make while they’re renting. But the reality is that it’s difficult for people to do this unless they engage themselves in a forced savings account, such as a mortgage.

6. Stable Costs
Yes. Buying a home requires MANY upfront costs such as the down payment, closing costs, moving expenses, and so on. BUT once you lock in that fixed-rate mortgage, your payment will remain the same, other than the costs of property taxes and homeowners insurance. Your mortgage payment can even go down if you decide to refinance to a lower interest rate.

If you’re renting, you’re at the mercy of your landlord and your rent payments are bound to increase over the years, in fact, since January of this year, the national median rent has increased by a whopping 16.4%. And guess what? NONE of the money that you use to pay for your rent comes back to you, however, a portion of the money that you use to pay for your mortgage comes back to you through paying down the principal.

7. It’s YOUR Home
I would say that the greatest benefit of owning a home is that it’s YOURS. Owning a home provides you with the freedom to customize it however you please. So you can say bye to having to reach out to your landlord whenever you want to paint the walls or replace the floors because YOU’RE the boss now! But remember that any home improvements that you make must still follow your local laws.
Are You Ready to Become a Homeowner?

Deciding to buy your very first home can be a nerve-wracking decision to make…I mean, you’re literally buying something that’s hundreds of thousands of dollars, so why wouldn’t you be a little nervous?
Well, if you’re thinking about buying your first home, and are feeling a bit nervous, then hopefully learning about all of the incredible benefits that come with owning a home helped give you some reassurance.

If you’re just starting to educate yourself on the home buying process, please don’t stop here. Keep searching for more resources to help educate yourself on this process, so that you can breeze through it like a champ! If you’re in need of some resources I’d be happy to provide you with some, so feel free to reach out to me if you’re interested.

And just know; you’ll never be 100% confident about any decision that you make no matter how much time you spend doing research, but if you wholeheartedly believe that a particular decision will benefit you, then go for it because confidence is created through taking action. Thank you for taking the time to educate yourself on the benefits of owning a home by reading my blog; I hope that you all become homeowners someday!

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