Owning A Home

Fall Decorating Part 2
October 19, 2012
What to Look for in a College Station or Bryan Home
October 28, 2012

Owning A Home

Homeownership comes with many benefits whether it is a home in Bryan or College Station or far away from Aggieland, and the least of which is that the home is yours! You are allowed to get a dog, or nine (unless you have deed restrictions…)! You can plant a garden, paint walls, change the décor, renovate, and do just about anything you would like with your new home. There are a number of other benefits. The community in which your home is located makes you feel more connected. You may join a neighborhood club or make friends with your neighbors at block parties. This gives you a sense of pride. The mortgage payments you will be making will slowly increase the amount of equity you have in your home. When you are renting a home, rent usually slowly increases over time. In a home, the normal, fixed rate mortgage locks in the amount of money you pay monthly for a set 30 years. This assures you stability. Your credit score should go up if you pay your mortgage on time. The stability that comes with owning a home allows you a sense of safety and consistency. You can stay in your home as long as you would like. There are currently tax write-offs that come with owning a home. The value of your home should also go up. Over the past 50 years, the value of homes has risen an average of five to six percent. Also, there may be tax free gain when you sell your home, meaning you pay no tax on the appreciation because you bought it.

These are just the tip of the iceberg of benefits that comes with owning a home. Now we will discuss the top six reasons to own a home in more detail.

Most first-time home buyers are intimidated by the large numbers that go with buying a home, and as a result, they continue to rent. The numbers should not scare you away from buying and maintaining your own home. The perks far outweigh the difficulties. Census data shows that a total of 68.3 percent of Americans are homeowners.

For one, tax deductions can be applied when you own your own home. Mortgage interest and property tax obligations may make a homeowner resentful when they receive the bills. However, come tax time, for both federal and state income taxes, you can deduct these payments from your taxes. In the first few years after purchasing a home, most of the payments made on the mortgage are represented as interest. Costs that you may have made on the closing of the home, for instance points paid, feed for the loan application and appraisal, could be deductible from your taxes.

Financial appreciation is another benefit. Homes are a usually safe investment and a joy personally. The value of your home should rise while the debt amount drops. Each year, the national, median home price has risen since 1968. Homes will appreciate typically with the rate of inflation plus a couple of percentage points. Sometimes, this is even more. A study done by Harvard University’s Joint Center for Housing Studies found a significant increase in the return rate of a home the longer it is held. An example of this is a buyer who makes a ten percent cash down payment with a home that has an annual appreciation rate of five percent. The buyer could expect a 94 percent return on the cash after three years of owning the home. After five years, the return would be at 225 percent and after ten years would be 623 percent!

Equity is another benefit of owning your own home. This rises over time. You cannot build equity if you are just renting a house. One renter states that she paid her landlords for nine years before they bought their house. Those nine years of rent added up to tens of thousands of dollars that were not going towards their appreciation or equity. By going ahead and investing in a home, you are forcing yourself to save. Additionally, a first home owned will often lead to a better second home. Typically, homeowners climb up the ladder by owning homes. The equity and appreciation buildup from a first home help with the transition to a nicer second home. According to a study by the NAR, the median down payment for first time home buyers is three percent. For repeat buyers, it is 22 percent.

Owning a home gives you more borrowing power. If you decide to stay put in the home you own, you can still use your equity for loans or to secure a good line of credit. This helps you have more financial resources when you want to remodel your home or make home improvements. You can also more easily secure cash for emergencies or big ticket items.

Owning a home allows for a sense of stability. Friends of mine were instructed to move out of their apartment by their owner. Apparently her daughter was moving into town in the next six weeks, and she wanted her to stay in that apartment. My friends had no say in the matter. They simply had to up and move out. Six weeks later they are now considering buying a place of their own so this never happens again. Renters have no idea where they will be or what they will be paying three years from now. Homeowners can have fixed mortgages and essentially the same payment for 30 years (excluding taxes and insurance of course). In addition, stability is gained from a community and neighborhood where relationships are formed, and roots are made.

Freedom is gained from owning a home. It is easier to speak up when you are the homeowner.  You can also make just about any decision you want about the interior and exterior of your home. Picking paint colors is entirely nonrestrictive and you will not find mysterious holes and scratches in your walls. You can plant gardens or trees and watch them grow over the years. You can put down roots and start a family in Aggieland!

Susan

  • Susan Hilton
  • CENTURY 21 Beal, Inc.
  • 979-764-2100
  • College Station Foreclosure Specialist
  • Bryan Foreclosure Specialist
  • Brazos County Real Estate License Education
  • College Station Real Estate Career Builder

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