If you’re like most people who are looking to buy a home, you probably have listened to friends, family and coworkers. Most of these people probably have encouraged you to buy a home. But, you may still be wondering if you should buy a home right now or wait. Don’t worry. This is normal. If you have any thoughts whatsoever about whether or not to buy a home, we recommend that you research the process a little. The more you know about why you should buy a home, the less scary the entire process will be. We have put together a few reasons that you should consider as to why you should buy a home at this time.
Pride of ownership – is the number one reason why people want to buy a home. It means you can paint the walls any color, crank up the volume on your stereo, put up any permanent fixtures, and decorate your home as you wish. Home ownership gives you a sense of stability and security. Buying a home is making an investment in your future.
Appreciation – Although real estate values go up and down, usually in cycles, over the long haul it has consistently gone up. We have just completed one of the most severe down cycles in history. Most experts now say that the real estate market has stabilized and going back up. This is now the perfect time to buy a home and a big reason why so many people do.
Mortgage Reduction Builds Equity – Maybe the biggest reason of all to buy a home is to build equity. Every month that you pay your mortgage, part of your monthly payment is applied to the principal balance of your loan, which reduces your obligation.
Mortgage Interest Deductions – If you buy a home you will obtain favorable tax treatment from the IRS. Mortgage interest is fully deductible on your tax return. Interest is the largest component of your mortgage payment. Many people make the decision to buy a home for this reason alone.
Property Tax Deductions – When you buy a home, whether it be a first home or an investment home, the property taxes you pay are fully deductible for income tax purposes.
Capital Gain Exclusion – Another popular reason to buy a home is to get the capital gain exclusion. As long as you have lived in your home for two of the past five years, you can exclude up to $250,000 ($500,000 for a married couple) of profit from your capital gains. You do not have to buy another home.
Equity Loans – Having the ability to get a low interest equity loan is another very big reason why people decide to buy a home. Interest paid on credit card balances cannot be deducted. These interest rates also tend to be very high. However, when a person obtains an equity loan and pays off the credit card debts, this interest – at much lower rates – is deductible. When you buy a home you can borrow against the equity in the home and use this money for amny reasons, not just to pay off your credit card debts. Many peoplke use home equity loans for college tuition, trips, a new car, and so on.