10 Reasons to Buy A New Home
December 5, 2013
There are many reasons to own a new home--some tangible and some intangible. Some reasons have a positive impact on your financial well-being, like with tax breaks, and some reasons improve your quality of life. 1. Make an Investment in Yourself - When you buy a home, you are no longer paying someone else's mortgage with no return on investment. 2. Homeownership is a Smart Tax Shelter - With the interest deductions that go along with owning a home, you reap the benefits of tax returns on both interest payments and property taxes. 3. Personal Pride and Customization - You can make it your own with custom wall designs, window treatments and permanent fixtures. In a rental, there is always that underlying feeling that you are not at home. 4. Investment Over time - While real estate runs in cycles (sometimes it's up and sometimes it's down), it consistently appreciates over time. 5. Favorable Rates - Mortgage rates are still very low historically, but they are inching up. With each move up in rates, you get less and less house for your money. Making an investment sooner than later will pay off in the long run as the economy improves and rates continue to rise. 6. Capital Gains Exclusions - There are capital gains exclusions that go along with selling a home that has appreciated in value. As long as you live in your home as a primary residence for more than two years, if you are single the first $250,000 in profit is not taxable and if you are married the first $500,000 is not taxable. 7. You Build Equity Monthly - Every month you pay off your loan, you reduce what you owe and build your principal, over time building the equity in your home. 8. Home Equity is Leverage - As you build up equity in your home, you can eventually take out a home equity loan if you need to. Unlike a credit card balance, home equity loan interest payments are deductible. Restriction on use of home equity loans vary from state to state, but for some you can use it to make home improvements, pay for education, pay off medical bills or start a small business. 9. Forced Savings - As you are forced to make your monthly mortgage payments and build equity in your home, you are essentially being forced to save money. 10. An Intangible Feeling Of Home - Some things just aren't financial. There is an inexplicable difference between the way you feel when you own a home verses just spending time in a home you rent for a while.