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The Attraction of Owning a Home

posted by Stephen Katz @ 3:50 PM
Thursday, March 24, 2011

Besides the promise of the “American Dream” there are some very real advantages of owning a home. These provide perspective when making the decision to become or to remain a home owner. Let’s look at the list of most-often cited advantages:

  • PRIDE OF OWNERSHIP. Sure, you are proud of owning something so large, expensive, and vital as a house. But this aspect is more than a vanity. Pride of ownership means that you are accepting a bigger role in your community (i.e., not as a fly-by-night renter). You take responsibility for the appearance and upkeep of your property. Your home becomes an expression of your taste and values.
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  • SELECTION. Although you can find single-family homes for rent, they may be in short supply in the neighborhoods where you want to live. For the most part, single-family rental homes are something of an oddity in the housing market. Most investors do not buy single-family homes to rent them out because they have to pay a higher price to outbid those who want to live in the home. When they are available, such homes often are available only temporarily, and not in the best locations and maybe not in the best condition. To get the type of home you want, you may need to buy rather than rent.
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  • ABILITY TO REMODEL. Landlords are not always keen on their tenants’ making significant changes to the premises. Understandably, they do not know how long you will rent and may find it difficult to get another tenant in a home with all the rooms painted pink. One of the great things about owning a home is the ability to change it according to your own tastes (although there may be limits on what you can do to the exterior, even if you do own the home).
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  • CONTROL. When you own, you not only have the right to remodel the home, but you have more control over your destiny (at least as far as where you live is concerned). You do not have to worry about needing to move when your lease expires. You don’t have restrictions attached to your ability to live in the home. As long as you make your mortgage payments and obey the law, you can enjoy your home indefinitely.
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  • PREDICTABLE COSTS. When you buy, you lock in the main cost of the home at the purchase price. Depending on the loan you get, you may lock in the loan payments as well, although the total monthly payment increases if it includes a provision for taxes and insurance. There are no unexpected rent increases. Many home owners find that their monthly payments actually decrease as their income rises over the term of the loan.
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  • INVESTMENT. The value of the home may increase over time, so that when you are ready to move, you are able to sell it for more than you paid. Though you have to repay the outstanding principal of the loan, you get to keep all of the gains from the increase value. If you borrowed money to buy the home, your rate of return on your initial investment is magnified. Even if the value of the home does not increase, you may have some gain because of the portion of your loan payments devoted to principal reduction.
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  • TAXES. The federal income tax code provisions that give special advantages to home owners. Interest paid on a mortgage loan for a home you live in can be used as an itemized deduction against taxable income. Property taxes paid on the home are eligible as well. These deductions may help lower the cost of homeownership, though the benefit of all itemized deductions is tempered by the standard deduction available to all taxpayers. Local governments often provide homestead exemption discount on property taxes due on owner-occupied homes. The potentially most important break, however, is the fact that for most people, gains on resale of a residence are exempt from taxation if you live in the home for at least two years.

Stephen Katz

(770) 309-0939 (direct) or (866) 742-8400 -- For the past 18 years, Stephen Katz has built a successful business almost entirely on referrals. As your mortgage consultant throughout the home loan process, Stephen will explain the pros and cons of all available mortgage programs and help you choose the financing option that is best suited to your needs. Throughout the loan process, he will keep you informed and will respond quickly to your requests with answers and solutions. Consistently a top producer, Stephen is a Mortgage Bankers Association "Diamond" Award winner, a Georgia Mortgage "Top Gun" and has closed almost half a billion dollars in loans. Put his knowledge and experience to work for you!

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