Financial and Other Major Benefits of Homeownership

If you’re considering your first home purchase in the near future but haven’t fully pulled the trigger yet, you may have read or heard quite a bit about all the benefits that come with owning a home — and wondered what they were really talking about. Many people talk very generally about these “benefits” without really digging into specifics, which actually sells the entire conversation short in many situations.

At Altius Mortgage and our partners with Mortgage Ogden, we’re happy to assist first-time homebuyers with a variety of solutions and home loan programs — plus by offering simple tips and expertise on the entire process, including the benefits of homeownership to begin with. What are some of the key benefits of homeownership, financial and otherwise, that many new homebuyers are considering? Here are several.

Tax Advantages

First and foremost, there are definitive tax advantages to owning a home as opposed to renting one. When you own your own home, the interest you pay on your mortgage loan is often tax deductible. In addition, any property taxes you pay can also be written off on your taxes in most cases. These deductions can really add up over time and offer some serious financial relief come tax season.

Furthermore, if you ever find yourself in a position to sell your home, the gain on that sale up to $250,000 for an individual or $500,000 for a married couple filing jointly is typically tax-free.

Now, it’s always best to speak with a tax professional to get the most accurate and up-to-date information on deducting mortgage interest and property taxes, as well as any other tax-related questions you may have.

A Sense of Stability and Pride

In addition to the financial benefits of homeownership, there are also some intangible benefits that come with owning your own home. For starters, it can offer a greater sense of stability than renting since your monthly payments aren’t subject to change at the whims of a landlord. In addition, you’ll likely take more pride in owning your own home and keeping it up to your own standards rather than someone else’s.

Of course, there are also some negative aspects of homeownership to be aware of as well, such as the added responsibilities that come with maintaining your own home. But overall, the pros tend to outweigh the cons for most people.

Building Home Equity

The longer you stay in your home, the more equity you’ll build up over time. Equity is simply the portion of your home that you outright own — as opposed to what you still owe on your mortgage loan. As you make payments on your mortgage loan and your home’s value appreciates, you’ll slowly but surely build up more equity in your home.

And as your equity grows, you’ll have the option to borrow against it in the future if you ever need to. This can come in handy for everything from home renovations and repairs to financing a child’s education or anything else life throws your way.

Of course, you don’t have to wait until you own your home outright to enjoy the benefits of homeownership. Even with a small amount of equity, you may be able to take advantage of certain programs and options that can help you achieve your financial goals.

Inheritance Advantages

Thinking well into the future, one of the biggest advantages of homeownership is that you can pass your home down to your children or other loved ones as an inheritance. Whereas with renting, once you’re no longer around, your family may be left scrambling to find a new place to live.

With owning, you can ensure that your family has a place to call home long after you’re gone. You also won’t have to worry about your loved ones being forced to sell the home in order to pay any outstanding debts or expenses.

And as an added bonus, if you do have a mortgage loan on your home when you pass away, your heirs may be able to assume that loan and keep the home without having to go through the hassle and expense of getting a new loan.

Hedging Against Inflation

When you own a home, your mortgage payments stay the same for the life of the loan in most cases. But as time goes on, that fixed payment becomes increasingly more affordable as incomes and other costs rise. This is due to something called inflation, which is simply the gradual increase in prices over time.

In other words, when you own a home, you’re effectively hedging against inflation. And as inflation increases, your purchasing power as a homeowner also increases since you’re not affected by rising prices in the same way as someone who is renting.

Possible Income Creation

Whether through renting part of your home out to tenants or running a home-based business, there are a number of ways you can create income with your home that simply aren’t possible when renting.

Of course, there are also some added responsibilities that come along with being a landlord or running a business out of your home. But if done correctly, the potential rewards can be well worth the effort.

A Sense of Community

Another big advantage of homeownership is the stability and sense of community it can provide. Unlike renting, your monthly mortgage payments are fixed for the life of the loan in most cases. This means you won’t have to worry about your housing costs going up unexpectedly every year or so.

In addition, when you own a home in a particular neighborhood, you’re more likely to get to know your neighbors and develop a sense of community. This can be great for everything from feeling safer in your neighborhood to having people to rely on in case of an emergency.

For more on the financial and other benefits of being a homeowner, or to learn about any of our mortgage rates or other home loan services, speak to the team at Altius Mortgage today.