5 Financial Benefits Of Homeownership
For many people, homeownership is synonymous with the American Dream. It’s also one of the biggest financial decisions they will ever make, which can be daunting. So, how do you really know when it’s time to make the jump and purchase a home? One thing you can do is take stock of the benefits of homeownership and decide if they make sense given your current situation. Sure there are additional costs, like regular upkeep and unexpected repairs, but often times the benefits outweigh the associated costs. Here are a few.
- Build Equity
One of the most significant benefits of homeownership is building equity, also known as ownership. With every monthly mortgage payment you make, a portion goes towards reducing the amount you owe on your loan. Or put another way, with every monthly payment, you own more of your home. Plus, as the value of your home increases, it also creates more equity for you. You’re still paying whether you rent or own, so you might as well invest in something that benefits you and not your landlord. Essentially, you are putting money back into your own pocket.
- Budget Certainty
Your rent can increase at any time, while your payment on a fixed mortgage will remain the same. For example, our GreatStart HomeLoan® offers a 20-year term with a fixed interest rate so you can be sure your payments will never increase1. Knowing what you’ll pay for housing year-in and year-out is a big advantage when making a budget and planning for the future.
- Smarter Saving
Owning a home will force you to think “smarter” about your spending and saving. If you get a bonus at work, you might consider putting it directly into your emergency fund or toward home improvements instead of spending it on luxury items.
- Tax Benefits
There are tax benefits of owning a home because you are able to deduct mortgage interest and property taxes from your annual income when preparing your federal tax return2. This is especially true during the first years of a mortgage when interest payments are highest.
- Strong Credit Score
You build a strong credit history when you buy a home and consistently make payments on time. This is beneficial to you in the future when you need other loans, like purchasing a car or taking out an additional loan for home improvements.
While these are great factors that can affect your home purchasing decision, each person must weigh the benefits for themselves. ENB is here to help you do just that! Consult one of our Mortgage Experts to find out if homeownership is right for you and which of our many great loan products will help make your homeownership dreams come true!