4 Reasons Why Home Ownership is THE Practical Long-Term Choice
Here are the top 4 financial reasons why you should be a homeowner:
1. Look at Homeownership as a Form of "Forced Savings"
Simply put, this just means that you as a homeowner build your equity as the mortgage gets paid. This is opposed to renting where you are the one shouldering for your landlord's mortgage (and then some) and the equity builds under your landlord's name. This equity will allow you for an extra avenue to tap financial resources from in the future such as for paying off high-interest debts or maybe putting the kids through college.
2. Your Housing Expense is Set
The usual dreaded phrase: Rising interest rates. When your home is purchased via what is known as a fixed-rate mortgage, it means that your monthly housing cost is locked and will remain the same for the next 5, 15, or even 30 years. This means that as you pay off your mortgage and build your equity, the value of your home will continue to rise due to inflation but your monthly costs will not.
3. Two words: Tax Savings
In case this is the first you have heard of this, one good thing about being a homeowner is you can avail of certain tax advantages. You may be able to deduct mortgage interest and property taxes. Best to check with your accountant to find out which tax advantages apply to you in your area.
4. Buying IS Cheaper than Renting
The Rental Trap is something that we are working on educating renters about. This is a situation where renters are locked in a contract for a specific period of time while the rental costs rise. This results in the struggle to balance between their cost of living (i.e. decent healthcare, groceries, food, education), being able to save for a rainy day, and the rising rental cost.
Perspective is still the key to everything. Look at it this way, you can always choose to make investments in gold or dabble in the stock market, but you will still need somewhere to live. Having a home that you own, you know you can wake up every morning knowing that your investment is gaining value while providing you with a safe place to live. So before you sign another lease, maybe it's best that you chat with a real estate professional in your area so you could learn about what options are available for you.