With housing mortgage rates currently at 20-year highs, you may ask yourself if renting a home might be a better option. While renting can be cheaper in the short term because of the up-front costs required for purchasing, owning a home can be more financially rewarding in the long run. Here are some of the benefits of owning a home:
1. Building equity - When you own a home, you can build equity over time. When you pay your mortgage, you're essentially reducing a part of the principal balance, thereby increasing your equity in the property. Viewing this as a form of forced savings can benefit in the long run.
2. Potential for appreciation - Real estate has historically been an excellent long-term investment. While there are no guarantees, owning a home can provide the potential for appreciation in value over time. This can be beneficial if you plan to sell your home or use it as an investment property.
3. Tax benefits - Homeownership comes with certain tax advantages. You can save money by deducting mortgage interest and property taxes from your income taxes. Consult with a tax professional to understand the tax benefits available.*
4. Sense of community—Owning a home can provide a sense of belonging and community. It helps you settle down, participate in community events, and form connections with your neighbors.
5. Customize how you want—Since it’s your home, you can update or add on however you like. After you have built up equity, you can always get a cash-out refinance to pay for upgrades.
Deciding whether to own a home or rent is personal and depends on factors like money, lifestyle, and plans. To learn more about securing a mortgage, talk to the experts at NASB at 888-661-1982 or click here.
*This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. North American Savings Bank does not guarantee or promise the results obtained. You should consult your tax, legal, and accounting advisors before engaging in any transaction.
