Perks of Home Ownership

As many homeowners have found, there are numerous benefits associated with buying and owning a property for a longer period of time. You might be still feeling uneasy about purchasing your own home; that is a natural reaction, since the process can be quite overwhelming if you do not have the right information.

You will find, however, that with some additional research and information, everything will be much simpler overall. Thus, let’s dive straight in and look at what exactly is it that makes home ownership such a beneficial prospect.

A Place to Call Home

The most obvious reason why home ownership may be a good idea is that you can actually take pride in your new property. You will not have to pay rent anymore or talk to your landlord whenever you want to make changes to any of your rooms. What is more, apart from being a profitable investment, home ownership will also give you a sense of safety and stability whenever things get rough.

Real Estate Appreciation

The increasing value of real estate over time happens regardless of any occasional market fluctuations that can pose a problem for homeowners.

This appreciation can best be observed by looking up the data provided by the Office of Federal Housing Enterprise Oversight. The house price index is organized according to area and region to provide a better assessment on real estate appreciation.

Capital Related Advantages

In case you have occupied a certain house or property for at least two of the past five years, you can qualify for profit from capital gains in the amount of $250,000 for a single individual and $500,000 for a married couple. A great thing about this rule that not many people are aware of is that it allows you to sell about once every two years almost completely tax-free.

Tax and Mortgage Interest Deductions

There are many benefits to long term home ownership. One of the most notable perks is the deduction you can obtain on mortgage interest. If your new home’s price is larger than your mortgage balance, this amount will be fully deductible – an incredibly beneficial asset when considering the fact that the most important part of your mortgage payment is the interest rate itself.

When it comes to property tax deductions, your main and vacation home have to meet specific requirements in order to qualify for full deductions. According to the IRS, anything from a regular house or condominium to a mobile home or a boat (provided they have sleeping and bathroom facilities) can be considered homes, and the requirements in question only apply to your main and secondary home.

For more information on the benefits and requirements relating to property tax deductions – especially if you’re new to home purchases – please refer to the IRS Publication 530.

While discussing taxes, it is worth mentioning that the government not only favors, but encourages long term home ownership. As a result, a profit larger than the allowable exclusion may be seen as a capital asset, bringing notable advantages such as preferential tax treatment.

Of course, whether or not you qualify may depend on the factors present in your specific situation; however, the IRS official website can provide some valuable information regarding these issues.

The Benefit of Building Equity

The equity – or the increasing partial value of the home that you actually own at a certain time – will be in a constant state of growth as you continue paying your mortgage and decreasing the amount you owe.

By adding a small extra payment each time you pay your monthly mortgage, you can start increasing your equity from the start instead of just having most of your payments go into the interest of the loan. By doing so, you will be able to decrease the amount you have left to pay at a quicker rate.