In previous posts I have discussed how owning your own home
can help build family wealth,
and that part of the reason is the historical trend in the appreciation
of residential Real Estate. In this post, I will discuss other
reasons to seriously consider buying your own home.
1. Although already covered, it
bears repeating that it is likely your new home will increase
in value over the long term. This trend will probably continue because
this country currently has a shortage of housing. Over the last three to four
years, this shortage is one of the three primary reasons for the significant
rise in home prices. The other two reasons were artificially low interest rates
and over four years of strong economic growth. Interest rates are still
historically low, even though higher than the best rates of the last few years.
True, the economy is currently sluggish and may get worse before it gets
better. The best analysts are still saying that prices will remain the same, or
increase very slightly; if prices fall, it probably will not be significant,
and will recover fairly rapidly.
2. In addition to the market
driving the increase in home value, you will build home equity with each monthly payment, a solid investment in your
future.
3. You can have more control over your monthly housing payment. Principal
and Interest do not change over the term of the lease. Escrow payments
for insurance and taxes do tend to grow, but usually not at a fast pace.
Private Mortgage Insurance, if you have it, is eliminated when your equity
reaches 22% of the loan. All of this helps to predict expenses in the
long-term.
4. Owning a home also means protection! Studies show as your home’s value
appreciates over time, it usually outpaces inflation year over year.
5. You may get a tax deduction. It may be possible to take advantage of a mortgage interest tax deduction and other tax benefits.
6. When you pay your mortgage on
time each month, you will build credit, opening
other avenues to borrow more money, perhaps for a “better” home in the future
or perhaps an investment property or other investment.
7. As the owner of your home, you
have the freedom to make it your own. You choose
how to modify your home and decorate it the way you want. You don’t have to ask
anyone for permission. You have greater privacy and control over your living
space. You can own pets without having to worry about landlord rules and added
fees. Similarly, if you have a backyard space you may be able to make it your
own and help you to enjoy the outdoors.
8. A well-maintained home can offer
a sense of pride and accomplishment. It’s yours
to do with as you wish. Make the most out of it.
9. The commitment to your home
helps build longer-term stability. The whims of
an outside force such as a landlord are removed.
10. Surveys show homeownership
does, in fact, result in increased happiness,
but not to the extent predicted by the future homeowners themselves.
Owning your own home is not always the best solution for
everyone or every family. There are perfectly sensible reasons for renting a
living space. Only you as an individual know your values and life goals, so you
make the decisions. However, home ownership is part of the American dream available to those who want it. Whether
you rent or buy, I am available to help you weigh the decision and achieve your
goal.
If I can help with these decisions or to find a new place, contact me at 301-873-2106 or email me at BReynolds@LNF.com
