1. The Opportunity to Build Credit
Securing a home loan can be a big step toward building your credit. Each month, your mortgage payment is reported to all credit bureaus. This can provide a huge boost to your credit score when you consistently make your mortgage payment on time. With a higher credit score, you may have the opportunity of accessing additional credit at better rates for future borrowing needs.
2. A Chance to Build Wealth
When you make your monthly mortgage payments, you are paying down your own asset. Real estate may be one of the most solid and profitable investments you can make. Once you make the decision to purchase your own home, you’ll be adding a valuable asset to your financial portfolio which you will own for as long as you choose. You’ll have the ability to leverage your home’s equity by selling or borrowing against it in order to fund future wealth building endeavors.
3. Building Equity
Equity is the value of your home less the amount you still owe on it. As you pay down your mortgage, your equity is likely to increase. Having equity may provide a safety net or a source of additional funds. You can borrow against the equity utilizing refinance options for life’s emergencies or opportunities; using it for things like medical care, travel or investments.
4. Potential Tax Deductions
The government looks favorably upon homeownership by providing tax deductions for property owners. You may have the opportunity to deduct the interest portion of your mortgage payments annually. Deductions for some closing costs and a deduction for property taxes may also be beneficial you.
5. Family Benefits
When you're a homeowner, not only do you benefit, but your family may benefit down the line as well. A home provides you with the ability to leave your heirs something real and tangible they can either keep, sell or share ownership of. It's a wonderful legacy to leave your family with the financial security of a home that's owned either partially or outright.
6. Upgrades That Save
As the homeowner, you have more control over everyday expenses. You can choose to better insulate your home with things like double-paned windows or interior wall insulation to bring down heating and cooling costs. You can invest in energy saving appliances permitting additional savings on your electric and gas bills. You can opt for modern HVAC components to ensure maximum efficiency. These are all things that you simply can't do when you’re renting.
7. Lower Monthly Payments
In many areas, your potential monthly mortgage payment may actually be cheaper than paying rent, potentially saving you a substantial amount of money over time. You can compare these costs with our rent vs. own calculator. Speaking with a lender regarding what type of payment fits within your budget is a good first step.
These seven financial benefits of homeownership demonstrate that you should consider buying a home when you’re ready. For more information about the benefits of homeownership, please reach out to one of our mortgage consultants today.
Not intended as an offer to extend credit nor a commitment to lend. The above should not be considered financial advice. Please contact a financial or tax advisor for guidance.