Buying Your Own House: 5 Reasons Why It’s Good FinanciallyNovember 24, 2016
For many people, owning a house is a financial fulfillment. For others, it can be their biggest problem. Acquiring your own house will be one of the biggest financial decision you will ever make – it’s like a make or break scenario. A lot of factors are kicking in when you think of home ownership.
Tons of questions play on your mind. Do you really need to buy your own house? Is your income enough to sustain the monthly or yearly payment? Are you ready for financial obligations? These are some of the questions you need to fill with honest answers. However, the biggest question you should be asking is how you are going to benefit from owning a house, a positive question to help you decide. Maybe asking your friends or other family members who have their own kit houses may help you to decide as well, there is no harm in trying.
Yes, it can be difficult at first but owning a house has its financial benefits which are good in the long run. When you think of it as a long-term investment, it won’t be too difficult to see that it can help you financially over time.
Here are some of the best financial benefits when you decide to own a house:
Offers lower mortgage rate
This is one of best reasons to own a house than renting a unit. Over the year, interest rates are decreasing that results to cheaper home ownership compared to renting. It lets the homeowners deduct the mortgage interest from their tax obligations. In the early years of paying the house, it is a big deduction since interest payments are often the largest component of your mortgage payment
Builds equity on a monthly basis
Equity means amount of money that homeowner can sell the property minus the other pending payment. Homeowners make a mortgage payment, and it reduces the amount they have to pay. Reducing the mortgage means increasing the equity. Building equity means the value of the house increases over time.
Becomes a hedge against inflation
One thing the people should know, the amount of payment when renting increases on a regular basis. However, the payment for a 30-year fixed mortgage will always remain the same, no matter what happens to interest rates or the economy. The overall price of the house is locked in for the chosen term of loan, like 15 or 30 years.
Acts like forced savings plan
When homeowners pay their mortgage every month and reduces the principal, it becomes like a forced savings plan. On a monthly basis, they are building up more valuable equity in their properties. The monthly mortgage payments lower your mortgage which becomes a forced savings account.
Recommends lower home prices
For first-time home buyers, it is essentially a great chance to select a real estate property at prices that may never happen again. For example, if first-time home buyer is able to find a pre-selling property, then the price is still on its lower rate. When the price goes up, the appreciation allows homeowners to build wealth.
Remember, there are a lot of things to consider when you plan to buy your own house. Both financial and non-financial elements play a big role on making a decision. Certainly, it is not cheap at all to buy your own house; however, it becomes rewarding as the years pass by because it can literally shapes up your financial situation. So, before starting the decision to acquire your own house, plan it well and make a realistic assessment.