3 Top Reasons To Buy A Home

1. TAX BENEFITS

Home owners can take four tax deductions* not available to renters. They are as follows:

* Mortgage Interest Deduction. The part of your monthly mortgage payment that goes to paying the interest on your loan is Tax mortgage deduction for home ownersdeductible from your taxes. This can be a fairly large deduction because interest is often the biggest component of your mortgage payment for the first few years after you buy your home.

* Some Closing Cost Deductions. For the year you buy your home, you can deduct the points, also called origination fees, charged to your loan, whether those points were paid by you or the seller.

* Property Tax Deduction. The real estate taxes you pay on your primary residence and a vacation home are deductible every year.

* Home Equity Loan Interest Deduction. If a lender gives you a home equity loan, or extends a home equity line of credit (HELOC) that you use for a loan, you can deduct the interest you pay. That’s why transferring credit card debt to a home equity loan can be smart. You get a lower interest rate AND a tax deduction that you can’t take for credit card interest.

The IRS allows home owners a capital gains tax exclusion when they sell. This applies to a home you’ve lived in as your primary residence for more than two years. When you sell, some profits are excluded from capital gains tax—up to $250,000 in profits if you’re single, and up to $500,000 if you’re married.
*Always consult a tax advisor for more information about the deductibility of interest and charges.

2. A WAY TO BUILD WEALTH

Every month, home owners build equity. The equity in your home is the amount of money your home is worth minus what you owe on your mortgage. A portion of every mortgage payment reduces the principal, or amount you owe. Every month, that reduction increases your equity—the money that goes to you when you sell.
The principal part of your mortgage payment increases every month (as the interest part decreases), so your equity grows quicker over time. You also keep the profits you make when you sell if your home increases in value, which homes are now doing, on average, in every state.

3. LOWER LIVING COSTS

Long term, buying a home costs less than renting. For the first few years, renting may be cheaper, but as the interest part of your monthly mortgage payment decreases, it will be less than the rent you would pay. Rents keep going up, while your mortgage payment always stays the same (assuming you have a fixed rate).

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com

 

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