Owning a home makes sense for many reasons. Here are a few of the top 1s.
1. You have the freedom to create your ideal living space. The freedom to customize your home to meet your specific needs and tastes. Want to paint your house hot pink or put a swing inside the living room? Go for it! You'll no longer have to worry about your security deposit.
2. You gain equity. When it comes to homeownership, investment and equity are directly related. As you make mortgage payments each month, part of the payment goes toward the interest, while the rest pays down the principal balance. Equity can be better defined as the part of the principal balance you’ve already paid, or the percentage of your home you already own. Paying the principal is like depositing money in the bank, because that money becomes available for reinvestment in the home itself or a new home.
3. It is easier to be energy efficient in a place of your own. Owning a home allows you the ability to 'go green'. You can choose energy efficient appliances, add solar panels, opt for eco-friendly landscaping, etc. You'll feel good about what you're doing for the environment and the low utility bill that you'll get each month.
4. You can take advantage of tax benefits. The federal government encourages homeownership (which in turn encourages economic growth) by offering tax incentives for homeowners. The biggest one is the option to deduct interest from mortgage payments on your income tax return, especially at the start of a mortgage when most of the payment is applied to the interest. Payments on private mortgage insurance (PMI) and certain home-related purchases also qualify for tax benefits.
5. Your pets will have a forever home. If you're an animal lover you'll know that not all landlords allow pets which limits the places that you can rent. You no longer have this problem when you buy a home nor will you have to pay for that extra pet deposit.
6. Your children will perform better in school. Your children will likely attend the same school with the same classmates and teachers year after year. Living for a long time in 1 neighborhood provides children with an opportunity to establish lasting friendships and reap the benefit of educational continuity. Think of your mortgage payment as an investment in your children's future.
7. You stabilize your housing costs. A fixed-rate mortgage means you’ll have the same mortgage payment for the term of the loan (usually 30 years), while monthly rental payments will continue to climb.
8. You can use your investment to make another investment. The equity that comes from owning a home allows many individuals and families to make future investments in the same home, a higher-valued home, a second home, or investment rentals.
Source: OC Realtor, The Aramco Group
