The American Dream. In most cases, this tag line refers to the accomplishment of purchasing and owning a home in the United States. Yet for some, renting has been a long-term situation and the true benefits of home ownership may be unclear or confusing.
Aside from the obvious benefits to homeownership (i.e. – your walls, your decisions!), there are numerous financial benefits of owning a home over renting. Here are the top 7:
- Homeownership builds wealth over time.
- Equity is typically achieved with every payment.
- Mortgage tax deduction benefits at year end.
- Tax deductions on home equity lines.
- Capital gains exclusions for primary residences.
- A mortgage is like a forced savings plan.
- Over time, buying is cheaper than rent.
We could elaborate much on each of these 7 benefits, and your accountant or tax specialist can also help you further understand how these may impact you. But first and foremost, the investment you make in the purchase of your home far outweighs your financial position when renting, with long term benefits and asset protection. Home buying is smart money management, especially in today’s market with low interest rates and attractive mortgage options!