Homeowner Benefits: 5 Benefits of Home Ownership
While many industries faced significant challenges in 2020 due to the coronavirus pandemic, the housing market has thrived. Mortgage rates have fallen to historically low levels, and housing costs increased in most markets nationwide.
With current mortgage rates and mortgage refinancing rates comfortably below 3% (2.73% for a 30-year FRM and 2.21% for a 15-year FRM, at publication), you may be considering buying a house. If your goal is to save as much money as possible, this might be a great time to find your dream home and take advantage of seriously low rates. Your potential monthly mortgage payment may never be less.
If you want to know what kind of loan rate you could get, you can explore your mortgage options by visiting Credible to compare rates and mortgage lenders.
If you are looking to find your first home, or if you want to improve your property to increase the value of the home, there are some advantages of home ownership to remember.
Benefits of owning a home
A major advantage of owning a home? Tax breaks. This is one of the main advantages for potential buyers. Tax breaks are available for single family homes, townhouses, condos, and manufactured homes. Tax benefits for homeownership specifically take the form of deductions.
The most common types of tax deductions include:
- Mortgage interest
- Property taxes
- Private mortgage insurance
- Profit from the sale of a house
While your tax returns will likely get a little more complicated, the savings may be worth it. When you have enough allowable tax deductions, it can lower your tax bracket and the amount of taxes you owe.
Before shopping, check mortgage rates first and get pre-approved from an online mortgage broker like Credible.
Another advantage of a home is that the value is likely to increase over time. If you stay in the house long enough (usually at least 5-7 years), you could profit from it when selling your house. House prices can change for a variety of reasons, including supply and demand, comparable selling prices in the same neighborhood, and population growth.
For example, in 2020, the average selling price of a house in the Salt Lake City, Utah the square footage was $ 384,000. As of December 2019, the average sale price was $ 330,000.
To ensure that your home maintains and / or increases its value over time, take good care of it. Updating electrical and HVAC systems, replacing damaged roofs, and renovating outdated areas of the home can add value to your home (while making it more comfortable to live in).
Owning a home is a great way to build credit. If you make your payments on time every time, your credit age and payment history will improve your credit score. Plus, a home provides potential access to home equity, which you could have access to in an emergency.
As you pay your home, you keep building equity. Equity is the difference between what you owe on the house and the value of the property. Overall, when managed properly, owning a home can dramatically increase your credit score.
Building investments in the future
Over time, if your home continues to rise in value and you continue to pay off your mortgage, your equity increases as well. The less you owe on your property, the higher your equity. Not only does this allow you to access additional credit as needed, but you can also sell the house or rent the property down the line for additional income or to fund your retirement.
Since market rates fluctuate, you could potentially get a better return on your investment if you take advantage of current mortgage rates.
If you are looking to buy a home in the current market, you can explore your mortgage options by Credible visit to compare rates and lenders and get a mortgage pre-approval letter in minutes.
Stabilizes your expenses
One of the most common reasons people buy a home is for the immediate benefit of stable monthly payments. While rental prices may continue to rise, once you own a home you have the option of making regular monthly mortgage payments for years to come (if you go for a fixed rate). mortgage; variable rate mortgages are another story). This benefit can help homeowners save money and more easily budget for other expenses.
When you get started with the home buying process, you can use a online mortgage calculator to determine your potential monthly payments. Some lenders offer a payment schedule so you can see how much you are paying each month. You will also be able to calculate the share of your payments towards the balance compared to the interest. This type of loan calculator is essential in determining costs, both short term and over the term of the loan.
Many people strive to own a home. In addition to the financial benefits, owning a home provides security and privacy. Many homeowners like to feel like part of a community and have the opportunity to personalize their living space. If you plan to stay in a community for several years, owning a home is a great way to save money and potentially earn money if your home has risen in value.
When considering buying a home, don’t forget to explore your mortgage options by visiting Credible to compare rates and lenders. The real estate market is hot right now, while current mortgage rates are at historically low levels, arguably the best time to act.