3 Major Financial Benefits of Owning a Home
If you’re still renting, you might be starting to wonder if buying a home is the right next step for you. While it is a big decision, home ownership offers many benefits and is one of the most rewarding purchases you’ll make. Aside from the pride of achieving this big goal, the ability to design a home that fits your lifestyle, and not having to answer to a landlord, there are financial benefits that you should know about. Transitioning from renting to owning is a great way to improve your financial well-being.
1. You Can Have A Fixed Monthly Payment
When you rent, your landlord can increase the rental payments at almost any time, typically at the end of your lease. However, homeowners have the advantage of opting for a fixed-rate mortgage which can help with creating an effective budget. A fixed-rate mortgage is when the monthly principal and interest payment stays the same over the life of the loan. In addition, if interest rates drop over time, there’s an opportunity to refinance the home to obtain a lower monthly payment.
2. Advantages Available at Tax TimeYou can’t write off paying rent on your taxes, but with a home, there are several tax benefits that can help put money in your pocket come tax season. A mortgage interest deduction is when the interest you pay on your mortgage is tax-deductible, therefore reducing your taxable income. A property tax deduction is similar but applies to the property, state, and local taxes you pay. If you choose an FHA loan and make a down payment of 20% or less, you may be eligible for mortgage insurance costs where you deduct mortgage insurance payments from your taxes. Make sure to consult a tax professional. Finally, when you sell your home, the profit you gain from selling is called capital gains. The capital gains exclusion allows you to be exempt from tax on the gains up to $250,000.
3. Building Long Lasting Equity
Equity is the difference between the market value of your home and the amount you still owe on your mortgage. Homes gain market value over time and in that time more and more equity is built with every payment you make, unlike renting where your monthly payments just go to your landlord. Equity can be considered a forced savings account that can later be used to help purchase another home, pay for home improvements, use toward education expenses, and more.
Connect with Ernest Homes for Your New Home!
There are many more benefits to owning a home, especially an Ernest home. We have several options available in the Coastal Georgia area that are designed to provide you with ultimate comfort. Our team is dedicated to making sure your buying experience goes above and beyond your expectations. We have single-family homes and townhomes ranging up to 3,080 square feet. Explore our homes and let us know if you have any questions by contacting us at 912-660-9673.