Home Ownership: Reasons Why You Should Become An Owner

There are many people who believe that times have changed and that renting is no longer throwing your money away. But even though there are some specific personal situations where experts would advice against ownership and in favor of renting a property, truth is that home ownership provides many benefits that should be taken into account whenever you are considering purchasing a property or renting. Following is a list of reasons why you should become an owner:

Purchasing a Property is an Investment

Due to the current situation of the national real estate market, many would say it is a bad investment. But truth is that when prices drop it is then the time to buy. Or as many suggest: buy when everybody sells and sell when everybody buys. The idea is that the purchase of a property regardless of whether you will be living in it or not is an investment and property’s prices tend to rise over the years.

Thus, even though that the currently prices are dropping, eventually the trend will stop and prices will start rising again. Moreover, your savings are safe as the bricks will most likely remain there so there is little risk to losing your investment. The last forty years have shown that investing on a property implies building capital at a rate of 4 to 5 percent each year. It may not be an extremely profitable investment but it surely provides safe and interesting gains.

Tax Benefits and Discounts

Though it really depends on the type of loan, the amount and your particular financial situation (some restrictions may apply), the interests on loans secured with your property can be deducted from taxable income. This not only includes the interests on your mortgage loan but also the interests on other loans for which your property is used as collateral such as home equity loans and home equity lines of credit.

Even those loans that are used to make home repairs or home improvements, as long as the amount owed is secured either with the property or with the available equity on your property (if you already have a mortgage loan and you use the remaining value of your property to secure an additional loan for home restoration or improvement) can be subtracted from taxable income. Therefore the interests on home improvement loans based on equity can also be deducted from taxable income.

A Source of Cheap Financing

A property is always a source of cheap financing even for those with bad credit. Since a house or condo can be used as collateral for a loan, the money owed and secured with it will charge only low interest rates because the lender has sufficient security knowing that in the event of default, the investment will not be loss because collection will be possible through the forced sell of the property.

Moreover, even if you have a mortgage on the property, with time and timely payments of your mortgage installments or by the simple increments on the value of the asset, equity will be built on the house or condo. This available equity will enable you to apply for a home equity loan or line of credit which provides similar interest rates as home mortgage loans. Therefore, home ownership guarantees you an excellent source of financing in terms of interests.