4 Benefits of Home Ownership

Author: Mohamed T Gulamali

4 Benefits of Home Ownership

1. Build Wealth
2. Tax Benefits
3. Family
4. Own VS. Rent

1: Build Wealth

Throughout history acquisition of property has been a financially savvy move, this is still true today.  Normally home values increase making now the best time to buy before prices continue to further increase.

Equity is your profit; it’s the difference between the Market Value & the Mortgage Debt you on the home.  Equity = Market Value – Mortgage Debt

Benefits of Equity:

1. It’s a forced savings plan since simultaneously as the mortgage debt shrinks the value of the property likely grows.
2. The more equity you have results in a bigger profit when you decide to sell. 
3. You can leverage it if you decide to cash out funds from your property through a refinance or home equity loan.

Factors that increase equity:

1. A larger down payment when purchasing a property.
2. Home values rise in the area
3. Renovations on the property 
4. Lowering principal by consistently making mortgage payments over time or paying a bit extra if possible.

Capital Gains Exclusion:
To avoid this tax on the sale of a home you just need to buy the home & live in it for 2 years.  When you sell the property you can keep the profits of up to $250,000 if you’re single & $500,000 if you’re married.

2: Tax Benefits

Mortgage Interest: You can write off 100% of the entire Interest portion of your mortgage payment which consists of Principal & Interest.  In the beginning almost the entirety of your payment goes towards the Interest portion on a sliding scale till the loan is paid off.

Property Taxes: You can write off 100% of the property taxes. 

​PMI or MIP is tax deductible but only if you’re single and your income is below $50,000 or if you’re married and your income is below $100,000

If you own a 2-4 family property you can additionally write off the following as well: 

Insurance	Depreciation	Legal and Professional Fees
Repairs	Management Fees	Cleaning and Maintenance
Supplies		​Advertising
Utilities		Commisions

Discount Points: Money paid to lower the interest rate is tax deductible

3: Family

You can tailor fit the home to meet the needs of you and your family, the upgrades will likely increase the value of your home as well.

Homeowners' Children vs. Renters's Children
(habitat for humanity nyc "benefits of homeownership")

​Math Scores +9% Reading Scores +7% ​College Graduation Rate +115%

Home Enviornment +22% Become a Home Owner +58% ​Behavioral Problems -2 to -3% or lower

4: Buying is Better than Renting:

Over time the principal and interest portion of your mortgage payment will be paid off.  This portion of your mortgage payment will obviously be lower than the rent you would have been paying with no end in sight. More importantly, you are not throwing away all that money on rent. You got to live somewhere, so instead of paying off your landlord’s home just pay off your own!

Rent Vs. Own	Advantage	Disadvantage
​Home Ownership	Family Privacy Investment Stable housing costs Pride of Ownership Tax Incentives	Maintenance & Repairs
​Renting	​ Short-term  Minimal repair costs	No Tax incentives No Fixed housing costs No Equity building

Author Mohamed T Gulamali

---

Free Info:

• Free E-Book: Mortgage Basics The Guidebook
• WHAT TO & NOT TO DO AFTER GETTING PRE-APPROVED 
• A PRE-APPROVAL IS YOUR FIRST STEP  
• MORTGAGE DOCUMENT CHECKLIST 
• MORTGAGE: BASIC REQUIREMENTS & MISCONCEPTIONS 
• RENTING VS. BUYING A HOME PROS & CONS 
• HOW TO BUY A HOME
• WHERE BUYERS FIND THEIR HOMES  
• 10 MORTGAGE & PROPERTY TAX DEDUCTIONS 
• CREDIT TIPS: HOW TO RAISE YOUR SCORE 
• 5 REASONS TO USE A BUYER’S AGENT