The Simple and Powerful Truths of Homeownership

This article originally appeared on Noozhawk and is reprinted here with permission from the author.

This week I wanted to give my readers who are renters a simple reminder about all the reasons why homeownership is a good idea.

1. Paying off a mortgage over time: I think all renters can agree that it really hurts knowing you pay a large amount of money in rent every month and that you will never see that money again. Conversely, with most mortgages, a portion of your monthly payment is applied to reducing the principal balance itself and the other portion is an interest payment.

Personally, I love watching my mortgage balance go down every month, knowing it will eventually be fully paid off and my living expenses will go way down at that time because I will no longer have a mortgage.

2. Mortgage Interest Tax Deduction: This year, couples filing jointly may deduct interest on qualified home loans up to $750,000. This is a great deduction that helps so many homeowners during tax time. This would be an approximately $20,000 deduction on a $500,000 conventional loan at 4 percent. Talk to your accountant to learn more about this.

3. Property Tax Deduction: For 2019 you deduct up to $10,000 ($5,000 if married filing separately) for a combination of property taxes and either state and local income taxes or sales taxes. Again, this offers further financial assistance when you are filing your taxes. Again,  this is another topic to chat about with your accountant.

4. Stability: As long as you make a responsible purchase, you can rest assured you will never be forced to move unless you want to. This stability helps homeowners plan for the future and better establish themselves in their community.

5. Appreciation: While real estate markets are in a constant state of flux, history has shown us that values increase over time. So in addition to paying off a mortgage over time and utilizing the tax benefits associated with homeownership, the value of your home will likely increase over time. Sadly, renters are not able to reap any of these benefits.

6. Increasing the value of your home through improvements: It’s as simple as it sounds. If your home is located in an area that can support higher values than what you paid, you should be able to invest time and money into the appeal and condition of your home to increase its value. Again, a renter does not have this opportunity.

These are just some of the reasons ownership is so appealing. I’m not mentioning them to make anyone feel badly for renting, or to say renting is not an appropriate option/choice for some. Everyone has a unique situation and ownership is not for everyone.

That said, if any of the above reasons piques your interest, the Santa Barbara Association of Realtors recommends you “Call your Realtor” and a local lender to help you determine if ownership is a good path for you.

— Thomas Schultheis is with Berkshire Hathaway HomeServices California Properties, and can be reached at 805.729.2802 or SbRealtorTom@gmail.com.

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