Buying a Home Is Better Than Renting
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Buying a home is better than renting
Even though renting requires no maintenance and is easier to relocate, buying a home is a better option because property builds equity, its a good investment, and it is yours to do whatever you want to it. Owning a home is a life long dream of many couples and families who want to start their new life. With a new home, every member of the family can fully experience and enjoy the rewarding privileges of owning a home and here are some of them.
“Owning a home has many benefits. When you make a mortgage payment you are building equity, and thats an investment. Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities- for example insurance, real estate taxes, and upkeep- which can be substantial.” (U.S. Department Of Housing Development, June) By making monthly mortgage payments, you are contributing to the equity in your home. Youll probably be able to get that money back when you sell. When a person rents a home they are paying the mortgage for the homeowner. You can even borrow against your equity to obtain a home equity loan. Equity loan interest is often much less and it is deductible. Consumers can borrow against a homes equity for a variety of reasons such as home improvement, college, medical or starting a new business. IRS Publication 530 states- “Most state and local governments charge an annual tax on the value of real property. This is called a real estate tax. You can deduct the tax if it is based on the assessed value of the real property and the taxing authority charges a uniform rate on all property in its jurisdiction. The tax must be for the welfare of the general public and not be a payment for a special privilege granted or service rendered to you.” (IRS Publication 530, 2011) Home ownership is also a superb tax shelter and our tax rates favor homeowners. Renters have no tax deduction at the end of the year. As long as your mortgage balance is smaller than the price of your home, mortgage interest is fully deductible on your tax return. Interest is the largest component of your mortgage payment. If you receive more profit than the allowable exclusion upon the sale of your home, that profit will be considered a capital asset as long as you owned your home for more than one year. Capital assets receive preferential tax treatment.
Indeed, owning a house can be very beneficial. Its a great investment because you have a
property to keep and an asset that will also increase its value in the future. So its important
that careful planning should be done before buying a new home. You should make an assessment
of your finances. Its best to stick to a realistic price so you wont end up with spending over the
budget. Although it feels great to implement all your desired home designs for your dream
house, you probably wont be too delighted about being stuck with one you cant pay for. You
should also do a lot of research before you consider buying your new house. As much as