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Home Ownership: Benefits vs. Risks
Sure, it’s tough to pull the trigger and buy a home, especially as a first-time buyer.
October 06, 2006
By Joseph Kenny
Category: tutorials
Related Articles: home owner loan rent tenant rental landlord benefit cons pros taxes equity mortgage
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Sure, it’s tough to pull the trigger and buy a home, especially as a first-time buyer. The big hit of covering both a down payment and closing costs is enough to scare any prospective buyer into staying a renter. When you combine the fact that you’ll be responsible for any fixes the house needs and that it’s pretty difficult to just pick up and move, owning your own home gets more frightening by the minute. But fear not, the advantages of owning a home far outweigh the risks. So if you’re already looking for a home, continue to do so. If you’re a renter, it’s time to reconsider. Benefits: Save big on taxes. When you own a home you’ll have to pay a mortgage and property taxes. It stinks, we know. However, the interest on those bills can help. They’re fully deductible for both federal and state income taxes. The first few years of your mortgage payments mostly go towards interest, which means a big-time deduction for you. As a plus, many times all costs associated with buying a home—including those involved with your loan application and home appraisal—are usually deductible. Equity is your friend Put simply, equity is the appreciation of your home’s worth over what you owe on it. That’s money in your pocket; money you can’t accumulate if you continue to rent. Stats show that homes have appreciated in value every year in the United States since 1968. That includes years of economic downturns and recessions. What’s more, you can build equity my making improvements to your house that you can
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