Home Residential Tools & Tips Benefits of Homeownership

Building Equity
When you purchase a home, you build equity with each payment. Equity is the difference between the fair market value of a home and the amount still owed on the property. It's like money in the bank. The more equity you have, the more cash you'll receive when you sell your home. It can also be used to secure a loan or applied toward purchasing a new home.

When you rent, your entire payment goes to your landlord. If your rent is $800/month, you'll pay $48,000 over five years.

Tax Savings
Interest payments, points, and real estate taxes are generally deductible from federal tax payments. Deductions for interest payments continue over the life of the loan while real estate tax deductions continue throughout the entire time you own the home. This savings is money that could be applied towards purchasing new furniture, remodeling, paying off debts, or even going on vacation!

Future Profits
Owning a home increases your net worth and gives you the opportunity for future profits. Although it is not guaranteed, home values have a tendency to increase over time. This means that you'll probably sell your house for more than you paid for it. The extra is money in your pocket.

Stable Costs
Purchasing a home can help stabilize your monthly costs. With a fixed rate mortgage, principle and interest rates remain the same over the life of a loan. The only time your payment will change is if your taxes and/or homeowners insurance change, giving you the peace of mind that you'll be paying about the same amount in ten years as you pay today. Even adjustable rate mortgages have rate caps to prevent drastic increases in payments.

When you rent, the landlord has the discretion to increase rent. As market rates increase, your rent may too- making it difficult to estimate your future expenses.