Many agree that owning your own home provides many benefits. Educational, health and Social benefits really don’t have a possible price tag be put on them but today let’s talk about some of the financial advantages of owning a home.
First and foremost, it is less expensive to own your own home than to rent one. Why? Because either way you pay a mortgage. Would you rather pay your own mortgage and build up Equity, or would you rather pay a landlord’s mortgage and build up the landlord’s equity?
With a mortgage, you are continually paying down the outstanding balance. And while you’re doing that, the value of the home, over the long run, almost always increases. This can be a very simple forced savings account.
You also have tax deductions which can help you when you are a homeowner. These are not available to tenants. As an owner you can deduct your real estate taxes and mortgage interest. As a tenant your landlord can deduct the real estate taxes and mortgage interest.
And in the long run as I said before, home prices will continue to run. Over the next five years experts predict home prices will rise by over 3% per year. That will be more than 17% over a five year period.
And please refresh my memory. What interest rate does a Certificate of Deposit pay?
