Owning a home is about much more than creating a sense of security for you and your family. Purchasing a piece of property is an excellent investment, and it could provide you with more benefits than you realize. Here is a look at just five ways that owning a home will improve your family's finances over the years.
Improve Your Credit
Many people begin thinking about buying a home simply to improve their credit. As long as you continue to pay your mortgage, the credit rating agencies will see you as a financially stable individual. With a higher credit score, other major expenses such as cars and student loans will have much lower interest rates.
Build Equity
Buying a home is like forcing yourself to open a savings account. When you pay your mortgage each month, you essentially own a little more of your home. If you ever decide to sell your home while the market is good, then you should get almost all of the money you have spent back.
It Is a Long-Term Investment
In addition to building equity, the value of your home might go up as well. That is why it is important to work with an agent, such as Leading Edge Real Estate, so that you can be sure you are buying at a good time and in the right area. As the market continues to improve and your home's value increases, it will become an investment that actually earns you interest.
Tax Deductions
Not only are there federal tax deductions for homeowners, but many states are now offering additional tax deductions to attract new residents. Everything from your closing costs to your mortgage interest could be deducted off of your taxes. These savings are especially prominent during your first year of home ownership.
Capital Gains Exclusion
If a family buys a home to live in as their primary residence and stays in that home for at least two years, then any increase in their property's value will be considered a capital gain. For a single homeowner, up to $250,000 can be claimed as capital gains. Couples can now claim up to $500,000 in capital gains from their home.
Even though purchasing a home can be a great opportunity, it is important that you do your research. You want to find a piece of property that is going to give you the absolute best return on every penny you invest.
Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most her time hiking, biking and gardening. For more information contact Brooke via Twitter @BrookeChaplan.