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Owning a home is more than the American Dream. It’s a decision that offers financial, social and emotional benefits. Still, buying a home is a big step, and the initial costs associated with it can scare people away. If you’re contemplating buying your first home or re-entering the housing market after renting for some time, keep these benefits in mind. We can assure you that the pride and stability that comes from owning a home will make everything else seem like a minor inconvenience.
Tax Deductions
Come tax time, you can deduct the interest paid on the mortgage throughout the year. You may also be able to deduct closing costs, points paid and fees for your loan application and appraisal.
Increasing Value
This may be hard to believe coming out of a recession, but homes are still considered a safe and steady investment. The national median home price has risen every year since 1968 when this information was tracked. As you pay your mortgage down, you’re basically putting money in the bank as a form of equity.
Equity
As you pay your mortgage down and the value of your home goes up, you’re building up your equity. It’s almost like paying yourself instead of paying your landlord. Once you have enough equity, you can move to a bigger home, or use it for borrowing power. Equity can help you secure another loan or take out a line of credit for education expenses or big ticket items.
Stability
Homeownership offers stability both financially and socially. With a fixed-rate income, you know what your mortgage payments will be each month for the next 30 years. On a social level, you know where you will be living, and you don’t have to worry about the landlord ending a contract.
Flexibility and Freedom
You can paint the walls pink. You can put in hardwood floors. You can plant a tree and watch it grow. You have freedom to do the things you want, and hopefully a stable neighborhood to go along with it. With renting, there are far more limitations that can prevent you from turning your house into a home.
