For many owning a home can seem like a daunting task. The approvals, the inspections the wait time until finally, you have those keys in your grasp. But with every great journey comes great rewards! Homeownership doesn’t just stop at a roof over your head, it provides some financial help to your portfolio. This is a major financial milestone as it gives your net worth and with inflation being as high as it is, the link between owning your home and building your wealth has never been more important.
Appreciation
When you own your home, your equity grows as your home appreciates in value and as you make your monthly payments. This acts as a contribution to a forced savings account that grows in value as your home does. Now, while there is no guarantee that the home you buy will appreciate there’s still always a pretty good chance. Taking a look at a study by the Federal Housing Finance Agency’s House Price Index, home values have appreciated an average of 3.6% each year since 1991. So, in addition to the amount you’ve paid off on your mortgage during your time, this appreciation in value builds even more, hence increasing your net worth. When you sell, any equity that you have built up comes back to you.
Taxes
Then there are the taxes. When you earn any profit from a property or an investment there tends to be a capital gains tax that you have to pay. However, if you make a profit when you sell your home, that profit cannot be taxed. Keeping more money in your pocket, with some limitations, you can also find yourself experiencing other tax benefits in the form of deductions on mortgage interest, mortgage discount points, and property taxes!
Housing Payments
Renters tend to suffer a lot with fluctuating rental prices which only continue to go up each year. When you have a mortgage you have a fixed, stable housing payment that won’t fluctuate over the life of your loan. With the cost of living staying down no matter what renters are experiencing, you can have much more to save! Putting you at an advantage to put more money towards other avenues to build wealth
In the end, more money in your pocket is nothing but beneficial. The road to home-owning might seem strange and sometimes unnerving but with our help, we can get you to where you want to be. Contact BSR Realty Group today to get started on your home-buying journey!
