6 Financial Benefits of Home Ownership
By: Kristel Gough – New Construction Loan Partner
|Beyond owning a great place to live, home ownership has some appealing financial benefits.
- Home Ownership Builds Wealth. Owning a home can be a very good way to create wealth over the long term. Buy a home you can afford that is a good value and that you will stay in more than a short time—5 years at least, or 7-10 years ideally.
- You’re Adding to Your Equity Every Month. Equity is the amount of money you’d get for selling your home, minus what you still owe on your mortgage. A portion of each monthly mortgage payment pays down the money you owe, called the loan principal, and adds to your equity. This portion of the monthly payment increases every year, so the longer you stay, the quicker your equity builds.
- A Mortgage Is Automatic Savings. Those monthly payments to pay down loan principal are building your assets, just like an automatic savings plan.
- Buying Is Cheaper than Renting over the Long Term. The interest portion of your monthly mortgage payment decreases over time, so if it’s not lower than your rent to begin with, it will be eventually. And even though interest is an expense like rent, unlike rent, it’s tax deductible, as explained next.
- You Get Tax Deductions. 1) The mortgage interest you pay each year is deductible on your Federal income tax return. 2) You can also deduct the property taxes you pay on your primary residence and a vacation home. 3) For the year you buy your home, you can deduct the points, called origination fees, on your mortgage. 4) If you take out a home equity loan or line of credit, any interest you pay on the money you borrow is also deductible. This lets you shift credit card balances to a loan with a lower interest rate. And that interest is tax deductible, which credit card interest is not.
- You Can Get a Capital Gains Tax Exclusion. This applies to a home that’s your primary residence for more than two years. When you sell, you can keep up to $250,000 in profits if single, up to $500,000 if married—without owing any tax on those capital gains. As with all tax matters, please contact a tax professional before making any decisions.
When you want to take advantage of these financial benefits by buying a new home please contact us. There are a wide range of financing options—feel free to call or email any time…. Have a great day!
P.S.: Mortgage rates are still at historically attractive levels, but it’s smart to start the process early. Please call or email us to explore the attractive options now available.
|The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in this message is the property of SecurityNational Mortgage Company and cannot be reproduced for any use without prior written consent. SecurityNational Mortgage Company NMLS 3116.
New Construction Loan Partner
6965 S. Union Park Center #260
Cottonwood Heights, UT 84047