1. Build Wealth Over Time
Homeownership can be a savvy financial move– we’ve always known that. The past decade has taught us something very important though: it’s only savvy if you buy a home you can actually afford.
2. Build Equity Every Month
The equity in your home is the amount of money you can sell it for minus what you still owe on it. Every month you make a mortgage payment, thus reducing the amount you owe, increasing your equity.
3. Tax Deduction Benefits
Mortgage, closing cost, and property taxes are just a few deductions you can utilize on your taxes. Additionally, you can deduct the interest you pay on your home equity line.
4. Capital Gains Exclusion
If you buy a home as a primary residence, you can qualify for a tax benefit. When you sell your home, you can keep profits of up to $250,000 if you are single or $500,000 if you are married and not owe any capital gains taxes.
5. Mortgage as a Savings Plan
Each month you are building more valuable equity on your home, reducing the amount of principal. You are being forced to save– which is a very good thing.
6. Buying is Cheaper than Renting
In the first few years, it may be cheaper to rent. In the long run, as your interest decreases, owning will eventually be cheaper than renting.