Tuesday, December 30, 2014

For me, home ownership = Freedom



Owning a home is one of the best financial decisions that most people can make in their lives. It is a rare situation when renting is actually better than buying and very few people fall into this category. Perhaps for someone that is constantly moving to different places due to their work or those persons that are not able to perform the routine maintenance associated with home ownership renting might be a better choice, but in most cases buying a home is far superior.

First of all, rent always increases but standard mortgage payments do not. 20 years ago the average rent in America was only $533! Today that figure is around $900 depending upon where you live. If one were paying a mortgage instead of rent all of that time, there would have been no monthly increase. That’s a lot of money over a 20 year period and in the end the renter owns absolutely nothing. Of all the reasons to buy a home, this is the most compelling in my opinion.

Equity is a word we often hear when speaking of home ownership and there’s a good reason for that. You already understand that equity is the amount of your home that you actually own, that’s already been paid for. I like to think of equity as a means to get cash if you really need it. An equity loan is easy to obtain (if your credit is reasonably good) and allows you to access large sums of cash at one time for a variety of reasons. These funds could be used to help finance your child’s education, to buy a much needed new car or to take that dream vacation you’ve always talked about! More importantly it’s a way to get cash in an emergency. This is an option that renters never have.

Big savings on taxes are also a part of buying a home. The IRS allows homeowners to deduct both their property taxes and interest paid on their mortgage. There are many other deductions that homeowners may qualify for as well that can greatly reduce their tax liability at the end of the year. Again, renters do not have this advantage.

Now that we have discussed some of the financial advantages of buying a home, there is something else that makes home ownership special. I like to call it freedom! You can do what you want in your own home. You can paint it any color you wish, remodel and customize it to be exactly what you want it to be. You have full artistic control, you are the boss. You need not get special permission to do anything because it is your home, not someone else’s.

There is a certain pride and sense of accomplishment that comes with home ownership that one can never experience when renting. There is a reason that owning a home is a big part of the American dream. Everyone has to live somewhere and for most of us there is no better place to hang our hat than in our very own humble abode.


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