Seminar #4 - Advantages to Home Ownership
you thought about how much money you throw away when you rent?
When you buy a home, you can live in your investment as you
you're like most first-time homebuyers, you've probably listened
to advice from friends, family and coworkers, many who are
encouraging you to buy a home. However, you may still wonder
if buying a home is the right thing to do. Relax! Having reservations
is normal. The more you know about why you should buy a home,
the less scary the entire process will appear to you. Here
are a few good reasons why you should buy a home:
Pride of ownership is probably the most significant reason
why people yearn to own their home. It means you can paint
the walls any color you desire, turn up the volume on your
CD player, attach permanent fixtures and decorate your home
according to your own taste. In other words, no more landlord
restrictions! Home ownership gives you and your family a sense
of stability and security. It is about making an investment
in your future. You, too, can enjoy more stability for
you and your family and experience the pride of ownership!
When you rent you are practically throwing money out of the
window, but owning a home is a safe investment for your future.
If you compare paying rent versus owning a home, over time
the numbers of what you lost can be staggering. By owning
your own home you are paying off your home, but by renting
you are paying off your landlord’s home!
See the chart
Rent vs Owning
Mortgage Interest Deductions
Home ownership is a superb tax shelter and our tax rates favor
homeowners. As long as your mortgage balance is smaller than
the price of your home, mortgage interest is fully deductible
on your tax return. Keep in mind that interest is the largest
component of your mortgage payment.
Property Tax Deductions
As a property owner you will be able to write off your annual property taxes
more about the Tax Advantage You will save Thousands $$$$
in your income tax burden. A great advantage to owning a home.
Although real estate moves in cycles (sometimes up and sometimes
down) over the years, real estate has always consistently
appreciated. The Office of Federal Housing Enterprise Oversight
tracks the movements of single-family home values across the
country. Its House Price Index breaks down the changes by
region and metropolitan area. Many people view their home
investment as a hedge against inflation. You can benefit
significantly from building equity in your home
Reduction Builds Equity
Each month, part of your monthly payment is applied to the
principal balance of your loan, which reduces your obligation.
The way amortization works is that the principal portion of
your principal and interest payment increases slightly every
month. It is lowest on your first payment and highest on your
last payment. On average, each $100,000 of a mortgage will
reduce in balance the first year by about $500 in principal,
bringing that balance at the end of your first 12 months to
If you have lived in your home for two of the past five years,
you can exclude up to $250,000 for an individual or $500,000
for a married couple of profit from capital gains. You do
not have to buy a replacement home or move up. There is no
age restriction, and the "over 55" rule does not
apply. You can exclude the above thresholds from taxes every
24 months, which means you could sell every two years and
pocket your profit--subject to limitation--free from taxation.
IRS tax tip
the Dean a Question
Consumers who carry credit card balances cannot deduct the
interest paid, which can cost as much as 18% to 22%. Equity
loan interest is often much less and it is deductible. For
many homeowners, it makes sense to pay off this kind of debt
with a home equity loan. Consumers can borrow against a home's
equity for a variety of reasons, such as home improvement,
college, medical or starting a new business. However, do not
fall victim to using your home equity and falling deep into
debt. Always use credit wisely.
a FREE Home Buyers seminar