Long-Term Benefits of Owning a House
By Space Coast Daily // February 17, 2020
The ‘American dream’ has several characteristics, like the opportunity to build and lead a successful life within a framework of freedom that allows you to do so, which many other nations don’t provide.
Within that dream is also the prospect of owning a home.
It’s estimated that in 2020, 6.12 million homes will be sold in the USA. Will you be one of those 6.12 million people?
If you want to own a home and can’t find the motivation to work towards that goal, it might encourage you to know that homeownership gives you ample benefits in the long-run.
Here’s what you need to know:
When you lease instead of buy, you are at the mercy of possible changes made by the landlord when you renew your contract. You might be subjected to a higher rent or the termination of a lease. You might have to constantly haggle over a rent increase, and probably not get anywhere.
Most people will buy a home with a mortgage, and this mortgage is a fixed rate that you pay over time, usually over a 20-year-period.
This sort of stability in knowing what is expected of you to pay every month provides peace of mind with no surprises coming your way. Although more expensive in upfront costs, in the long-run, it’s cheaper than renting.
Being able to deduct interest on a monthly basis from tax returns is probably the greatest plus that you can gain once you own a home.
Typically, the first year of a mortgage is when the borrower’s monthly payment just almost consists of interest. You should then expect a good deduction at the end of each year.
Building home equity is one of the biggest reasons and advantages of owning a home. Home equity is the interest you own in the house, and this can increase when your mortgage is paid off.
This equity is your most important asset that can be used later on. Your equity can increase even without you doing anything, simply because of a healthy real estate, or neighborhood improvement projects.
When you pay your home loan or mortgage, you’re essentially building up your own asset.
People who want to invest money in something that will secure their present and future may consider stocks. But if you know that real estate outdoes stocks by a ratio of 2:1, you might want to reconsider stock investment.
Financial advisors from HighReturnRealEstate.com recommend considering turn-key investment deals before you purchase real estate. This way, your money will be invested in a house that is ready for you to live in or rent out.
A turn-key real estate investment works by having a developer or contractor complete an entire project on behalf of a buyer. Up to a certain point, the developer is responsible for everything in rehabbing a property, including land purchase or zoning, and other factors that go into home purchases.
Some of these types of firms also provide property management, as well as overseeing and being responsible for maintenance and repairs.
A turn-key investment in a second home brings in a second income immediately once the deal is done, which is a great opportunity for investment.
Around 35% of your FICO score is based on your credit history. Your FICO score is sort of like a summary of your credit history, and this history determines the amount, interest rate, and terms of being loaned money by financial institutes. Each time you pay back loans on time, your FICO score should go up.
By the same token, late payments on your mortgage can reduce your score. But as long as you continue paying on time, you will build up your score and have the opportunity to make future financial purchases at comfortable rates.
As you’ve probably already heard, location is the most crucial factor when it comes to real estate purchases. Not all areas across any state provide enough rental choices.
You might be living in an area that limits your choices. Buying a home increases your options to live in the location you want. If you have a growing family with your children, this is a crucial factor to consider.
If suburban life appeals to you, the chances of finding a preferred rental property that suits a family lifestyle might not be as readily available as you may think, which makes owning a home a more suitable option for you.
Of course, there also comes a certain high degree of prestige when you own your own home. You can also renovate and change it the way you want to.
Realizing that a purchased home is an asset with several financial and social benefits should be enough reason to pursue the American dream, and buy a house to create your memories in, and help secure your financial future.
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