Owning your own home has been an integral part of the American dream for decades. But why exactly is that? This article will dive into the benefits of homeownership and help you decide whether it’s right for you.
The advantages of owning a home
Before considering the advantages of owning a home, you should determine if you’re financially ready. If you have a surplus of cash or are looking to make an investment that will appreciate with time, homeownership may be a good option to consider. It’s best practice to take out a mortgage on a home with monthly payments below what you can afford, so that you don’t end up in a bind if something were to change. Once you’ve decided that buying a home would be a safe financial decision, you can reap the benefits of homeownership.
Owning a home requires fiscal responsibility, before and after the purchase. It takes time to save money for a down payment and build credit that will get you the best mortgage possible. Once you buy your house, you’ll be making monthly payments towards your mortgage. You’ll also be paying for upkeep and utilities to keep the home in shape.
One of the main perks of owning a home is that it’s yours. You can paint your walls or even expand your property without worrying about a landlord's approval. Many people have a great sense of pride and comfort in owning their own home which is valuable in and of itself.
There can also be tax benefits to owning a home, such as deducting mortgage interest from your federal income tax. If you ever sell your home, you may also be able exclude a limited amount of profit from taxable income as well. Always check with your personal tax advisor to better understand the potential tax benefits of homeownership.
Is buying a home a good investment?
Owning a home is generally looked at as an investment. Although the market is constantly changing, from a long-term perspective, home values typically appreciate over time. If you plan on staying in your home long term, you stand to make money when you sell. This all depends on your mortgage, the value of your home, how much equity you’ve built up and the market climate when you sell.
The pros and cons of buying a home
- Pride in ownership
- Control over property
- Often a good investment
- Builds financial responsibility
- Not good as a short-term investment
- Big financial commitment
- Responsible for upkeep and repairs
- Can be difficult for first time homebuyers with little to no credit
Is buying a home right for you?
Buying a home is an exciting undertaking. It’s a huge milestone and gives people a deep sense of pride. The ability to craft your own space, build a life and family, settle down somewhere long term and even make money is something many people desire. Making sound financial decisions is always best practice, whether you’re renting or buying.