Buying a house has all the obvious benefits, but some are much less obvious than others. And last but not least, buying a home can be very painful, and it’s not just about money.
There are several hidden benefits of owning a home that most renters are not yet aware of.
Here’s everything you need to know about carrying out home research and why you should consider buying a home.
1. Never-Ending Inflation
The U.S. Census Bureau has a chart of historic homes on its website that began in the 1940s and ended in 2000.
The report shows that the median home price, adjusted for inflation, was $30,600 in 1940 but rose to $119,600 in 2000.
House prices are rising at a 43 percent pace; the bureau said, the fastest pace since the 1970s. The median price of a US home, after taking inflation into account, was about $2,500 in 2000, compared with $1,200 in 1970.
Someone who invested in the stock market in 1940 could become a millionaire today, provided they survived a few crashes over the years. While some will say they are, there are other considerations: How many people have invested $30,600 since 1940, and how many of those invested shares are worth?
How much would you pay in rent in six decades, and how much more than you would pay in six years? A recent study by the US Department of Housing and Urban Development (HUD) showed a correlation between the price of a home and the value of the stock market over the same period.
2. Financial Burden vs. Long Term Rewards
The first time you buy a house, it often comes with a financial burden – you have to make a down payment and deal with unexpected home costs. You feel the pressure for a few years, but after that, it gets easier for two reasons.
First, your mortgage payments won’t go up if you fix the mortgage, making your payments more affordable at the start of your career.
Paying off your mortgage on time also means you build up equity each month. Meanwhile, tenants are getting rent increases that go hand in hand with their higher salaries.
These assets allow you to borrow money or sell it in the future and use it for other purposes, such as a car or home loan.
3. Tax Perks
Ask a professional about your individual situation, but mortgage interest and certain closing costs are usually tax-deductible. The biggest relief you get in the first few years is when you pay off most of the interest on your mortgage.
Federal taxes are payable, but mortgage insurance and property taxes can also be deducted, and many states allow similar deductions. Better still, you can collect up to $250,000 in capital gains tax without a joint lawsuit that you and another couple have filed.
4. Doing What You Want in Your Own Home
If you want a menagerie of pets, you have to paint the walls purple and take down the engines and wood in the shop at weekends.
As a tenant, you have no choice but to increase your assets, but no landlord can tell you what is allowed and what is not.
You can consider building up equity in your home by making payments each month with these types of savings. Buying a home improves your credit rating because you don’t have to be afraid of a landlord or to let them tell you you can’t.
Confirm your credit rating with the Federal Reserve Bank of New York or the US Federal Deposit Insurance Corporation (FDIC).
5. Home Wealth and Ownership
Homes account for nearly 60 percent of homeowners “wealth, and those who own a home earn $46,000 a year, while non-homeowners accumulate $1,000. A study has found that homeowners are acquiring more than twice as much wealth as their tenants. Of course, renters can also save on their mortgage payments, property taxes, insurance, and other expenses.
Homeownership is one of the most reliable ways to accumulate wealth because most people don’t need a mortgage, a car, or even a bank account with a credit card or credit card.
You can decide for yourself whether the seventh advantage of homeownership is valid, but the other six may be convincing. You probably won’t make a better apple pie, and that’s not true, so decide to get involved in your neighborhood and support your children’s efforts.
If you consider buying a home, today’s low mortgage rates can help you take the plunge. See if you can afford it, get started, and if so, sign up for a mortgage to get started.
If you are still unsure how much to spend or what property to buy, be sure to check out this First Time Homebuyers guide.
If You Want to Buy a Home, Do Your Home Research First
If you want to buy a home, then you first need to do your research to make sure this is the right decision for you. There’s no point getting a mortgage and buying a home if it’s going to cripple you financially.
Having said this, there are many benefits to owning a home if you can afford it. You can have a space that is entirely yours. You can decorate it how you like it and bring in pets.
Houses are also a great financial asset. Looking back through history, house prices have risen consistently over the past few decades. This trend seems likely to continue. This is a much better decision than putting your money in a bank.
If you are interested in learning more about how to buy a home and how to do home research, be sure to check out the rest of our site.