Benefits of Home Ownership

Owning a home may be the American dream but it also brings many benefits to the home owner. Some of these benefits include a personal income tax deduction, equity growth or appreciation, stable housing costs and the freedom to personalize your surroundings.

Purchasing a home is an investment in your future. A home is considered an asset and increases your net worth over time. It can improve your credit rating as you pay your monthly payments and increase your ability to borrow as the amount owed on the home decreases and the value of the home increases.

Haven’t been able to build up a savings account? Purchasing a home creates a “forced savings account”. The savings account is created in two ways:

1) Historically, homes in the Boise area appreciate, or increase in value, 4-6% per year. As the equity in the home grows year by year, your “savings account” grows.

2) As you make your monthly payments, part of the payment is applied toward the “principal” or amount borrowed. As you pay down the amount of the loan each month, you increase the “savings account” each month by that amount.

Another benefit to home owner comes through a deduction in personal income tax. Home owners in the United States receive a deduction on their personal income tax for the interest paid to their lender each year. In addition, property taxes paid on the home are deductible. This can amount to a substantial savings on the amount of income tax paid each year.

Renters have no control over their monthly outlay for housing – that decision is made by the landlord. Of course, if the rent is increased too much you can always move but that can be expensive as well. Purchasing a home can provide stable housing costs. With a “fixed rate loan” the amount paid toward principal and interest remain the same throughout the life of the loan. The only variable components to the loan are property taxes and insurance to cover the home.

Want to paint or remove a wall to open up your living space? If you own the home, you can! Your home can express your individuality and if your family outgrows your home, you can always remodel to add additional space. Or sell and take the equity you’ve made on your existing home for your downpayment on a larger home.

With all of the benefits of homeownership, why would anyone not want to buy a home? Some reasons might include:

  • Can’t save money for a downpayment/closing costs
  • Don’t want the responsibility of taking care of a yard
  • Can’t afford the monthly payments

Can’t save money for a downpayment and closing costs? In this “buyer’s market”, often the seller will pay all or a portion of the buyer’s closing costs. In addition, if you’re a first time home buyer, a program through Idaho Housing and Finance Association can provide up to $3000. for closing costs or downpayment.

No lawn care responsibility? Condo and townhomes are available where the homeowners association pays for an outside contractor to take care of the mowing, trimming, weeding and sprinkler system.

Monthly payments too high? With the tax benefits and “forced savings” of owning a home, you may find that you’re paying less for a home than you would if you were renting.

If you’re interested in learning more about the benefits of owning a home, please email or call me today — 208.866.5590.