In todayโs 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 youโre a renter, itโs never too early to think about how homeownership can propel you toward a stronger future. Hereโs 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 Wonโt Always Have a Monthly Housing Payment
Personal finance advisor Dave Ramsey explains:
โEvery 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.โ
As a homeowner, you can eventually eliminate the monthly payment you make on your house. Thatโs 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 donโt always think about are the tax advantages of homeownership. The same article states:
โYou have tax advantages. Many of the costs of owning a homeโlike property taxesโare tax deductible. And if youโre paying off a mortgage, youโll get to count your mortgage interest as a deduction when you file your tax return.โ
Whether youโre living in your first home or your fifth, itโs a huge financial advantage to have some tax relief tied to the interest you pay each year. Itโs one thing you definitely donโt get when youโre 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 doesnโt happen if youโre renting. Ramsey also notes:
โRent 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.โ
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 todayโs low mortgage rates, itโs 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 youโre going to spend in your mortgage payment each month, buying a home may be your best bet.
Bottom Line
If youโre ready to start feeling the benefits of stability, savings, and predictability that come with owning a home, letโs connect to determine if buying sooner rather than later is right for you.
Content previously posted on Keeping Current Matters
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