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Why Owning a Home Is a Powerful Financial Decision

Why Owning a Home Is a Powerful Financial Decision | Simplifying The Market

In todays housing market, there are clear financial benefits to owning a home: increasing equity, the chance to build your net worth, and appreciating home values, just to name a few. If youre a renter, its never too early to think about how homeownership can propel you toward a stronger future. Heres a dive into three often-overlooked financial benefits of homeownership and how preparing for them now can steer you in the direction of greater financial security and savings.

1. You Wont Always Have a Monthly Housing Payment

Personal finance advisor Dave Ramsey explains:

Every payment brings you closer to owning the house. When you pay your rent, that money is spent. Gone. Bye. Not returning. But when you pay your mortgage, you work toward full ownership.

As a homeowner, you can eventually eliminate the monthly payment you make on your house. Thats a huge win and a big factor in how homeownership can drive stability and savings in your life. As soon as you buy a home, your monthly housing costs begin to work for you as forced savings in the form of equity. When you build equity and grow your net worth, you can continue to reinvest those savings into your future, maybe even by buying that next dream home. The possibilities are truly endless.

2. Homeownership Is a Tax Break

One thing people who have never owned a home dont always think about are the tax advantages of homeownership. The same article states:

You have tax advantages. Many of the costs of owning a homelike property taxesare tax deductible. And if youre paying off a mortgage, youll get to count your mortgage interest as a deduction when you file your tax return.

Whether youre living in your first home or your fifth, its a huge financial advantage to have some tax relief tied to the interest you pay each year. Its one thing you definitely dont get when youre renting. Be sure to work with a tax professional to get the best possible benefits on your annual return.

3. Monthly Housing Costs Are Predictable

A third benefit is the fact that monthly costs start to become more predictable with homeownership, something that doesnt happen if youre renting. Ramsey also notes:

Rent rates will go up. Even if you found a killer deal in a hot area, inflation, competition, and rising property values will cause your rent to go up year after year.

With a mortgage, you can keep your monthly housing costs relatively steady and predictable. Your monthly costs are most likely based on a fixed-rate mortgage, which allows you to budget your finances over a longer period of time. Rental prices have been skyrocketing since 2012, and with todays low mortgage rates, its a great time to get more for your money when purchasing a home. If you want to lock-in your monthly payment at a low rate and have a solid understanding of what youre going to spend in your mortgage payment each month, buying a home may be your best bet.

Bottom Line

If youre ready to start feeling the benefits of stability, savings, and predictability that come with owning a home, lets connect to determine if buying sooner rather than later is right for you.

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