The biggest financial move many individuals make is owning a house. Though sometimes it can seem daunting, the many advantages that come with homeownership make everything better.
If you’re considering taking the homeownership leap, but you can’t seem to gather the confidence to really make the major move, there are many positive aspects to owning a house, but, honestly, some go unrecognized or underreported.
Renting may seem like the best choice in the short run, but here are some compelling reasons why owning your own home will build real value overtime for you.
Believe it or not, owning a house offers many financial advantages. Both mortgage interest and real estate taxes are excluded from the annual income tax as a homeowner.
This is a significant discount for many individuals, according to Forbes, since interest payments in the initial years of homeownership are by far the most popular aspect of your mortgage payment. And the existing mortgage interest rates continue to remain low, to cap it off.
The amount of the value of your property is your equity. When your home’s market value rises (or if you make additional payments on your mortgage), it increases. You can eventually maximize your home equity and access it when you own your home.
You can do so by redrawing your loan or borrowing with an extra advance or mortgage refinancing on top of your equity. This money can then be allocated for several things, from renovating your property to purchasing a new vehicle or even taking a nice vacation.
The biggest chunk (35%) of your FICO score that financial institutions use to determine the amount, cost, and conditions for loaning you money is the payment history on your debts. Your FICO could go higher if you continue to make the full mortgage payment on time.
Your FICO can also increase progressively when you decrease your mortgage loan balance, as 30% of your FICO is related to how much you owe. Late payments, in turn, would damage your FICO score.
A mortgage payment 30 days past due, for example, might decrease your score from 720 to around 630 and 650. Thus, pay on time, and your FICO will grow, making it easier at affordable prices to fund future transactions.
Being able to modify it to suit your taste is by far the most evident advantage of owning a house. With your newfound freedom to renovate, build, and add anything and all your heart wants, the “dream house,” you always dreamed of will soon become a reality.
Landlords are typically not pleased to renovate their property for tenants, even though you believe you’d be upgrading it. When you own your home, you have total artistic freedom— you can choose to fully redecorate the shower in a tropical theme or repaint it in crazy vibrant colors without worry.
In general, home improvements boost the value of a house, so if it’s your home, the money will be in your own wallet as you market every dollar that your home has increased in value (thanks to your personal effort).
There’s a lot to carefully consider as you decide whether to continue renting or to buy a home. It’s crucial to understand how such a purchase would impact your finances and lifestyle before getting a house.
While buying a home might seem a little overwhelming, if you pause for a moment and look at today’s average rental costs, owning it will potentially save you money. Over time, rents increase, while mortgages stay steady and gradually decrease as the years past.