Thinking about buying a new home? Not quite sure you’re ready to commit? It’s perfectly normal to have cold feet—especially if you’re a first-time buyer. Homeownership is a big step, both emotionally and financially. But, like many other major life events, owning your own home can be an incredibly rewarding experience. And the more you learn about the process, the more comfortable you’ll become with the idea of being a homeowner. You can start by familiarizing yourself with the many benefits of homeownership. Here are 5 compelling reasons to get you started:
- Freedom. When you sign a lease or rental agreement, you’re often consenting to let your landlord make the decisions about your living space. If you’re tired of playing by someone else’s rules, it may be time for a home of your own. Being a homeowner means having the freedom to paint the walls fuchsia, plant a rose garden or adopt that large-breed dog you’ve always wanted. It also means that nobody has the right to enter your home without proper notice or permission (a landlord’s legal right in many areas).
- Stability (a.k.a. roots). Becoming a homeowner means the days of hopping from one rental to the next are over. You’ll finally be able to stay put, or “plant roots.” Committing to a permanent address can lead to establishing lasting friendships with neighbors, becoming a “regular” at local businesses (i.e., laying claim to your coffee shop or bookstore) and playing a more active role in your community. If you’re a parent, consider that homeownership can also provide educational continuity—your kiddo(s) may attend the same schools with many of the same classmates and faculty for years to come.
- Predictability. Do you worry about rent increases every time your lease is up for renewal? If you opt for a new home with a fixed-rate mortgage, your monthly principal and interest payments will remain the same for the life of your loan. That means you’ll never be surprised by a sudden jump in housing costs! And if you happen to have extra funds to contribute, you can chip away at the principal and shorten the length of your mortgage.
- Forced savings. You’re faced with housing costs each month—regardless of whether you rent or own your home. But unlike rent payments, which seem to vanish into thin air, your mortgage payments have the potential to help you build equity in your home. That’s money you may see again if and when you decide to sell. Voila… a ready-made savings plan. Also, owning a new home sometimes costs less than renting one, which translates to more cash in your pocket (or bank account).
- Tax breaks. The US tax code currently allows many homeowners to deduct the interest paid on their mortgage and property taxes. Plus, when you finally decide to sell your home, you may be able to exclude gains of up to $500,000, depending on your marital status. As long as you have lived in your home for two out of the last five years prior to selling, you can look forward to this bonus!*
Ready to buy your dream home? There’s no time like the present (especially considering today’s interest rates), and we’re here to help. Download our First-time Homebuyer Guide and contact the Richmond American Homebuyer Resource Center in your area to begin your new home search.
*Please note: $10,000 is now the deduction cap for property, state and local income and sales taxes combined. For homes purchased after December 15, 2017, interest paid is only deductible on the first $750,000 of a mortgage.