6 Reasons You Should Buy Your First Home
Renters: Here are six very strong reasons why you should move out of your rental and buy your first home.
If you do not yet own a house of your own and are currently renting, here are 6 very, very compelling reasons why you should buy your first home.
1. Enjoyment. The primary reason you should purchase a home is for the enjoyment it will bring you and your family. You should buy a home that you will love living in! Undoubtedly, the first house you buy will not be the home you live in the rest of your life. As you mature your income will likely improve and your housing needs and desires will expand. You will likely sell your first home and trade up to a larger, nicer one. However, your primary focus when choosing your first home is to buy a house that will bring you enjoyment each and every day that you live there. If you do that, the improvements in your quality of life will be literally priceless.
2. It is an investment. Your parents most likely bought their first home in the 1970's for $12,000 - 20,000. Today, that same home would sell for $175,000 or more as the average sale price in Maine. Granted, much of that increase in value is due to inflation, but with government spending and deficits at record levels, inflation will continue and likely accelerate in coming years. By buying a home now, you will own an asset that will go up in value as inflation causes the general price level of everything to rise.
3. Tax Savings. The tax savings from mortgage interest can be huge. If you are currently paying $1,000 per month to rent your apartment, that same amount applied to a mortgage loan payment would result in a nearly $12,000 tax deduction in the first few years of a conventional mortgage, nearly all of the payment goes towards interest, and very, very little goes toward paying off the loan. The interest is tax deductible. If you are in the 28% tax bracket, this one deduction would be an annual savings of over $3,300 on your income taxes.
4. Financial Benefits. Whatever you are currently paying for rent, it is money that is simply spent, never to return to you again. Contrast that to buying a home using a mortgage loan; instead of spending money on monthly rent, you are paying off a loan used to purchase the property. With each monthly payment, the loan balance goes down, and the equity in your property goes up. The monthly payment goes toward buying an asset that should go up in value. Besides the shelter that is provided, you get to keep an asset.
5. Privacy. As a renter, you are not entitled to the same level of privacy that a home owner is entitled to. It is common for landlords to retain the right to inspect the interior of their property upon giving the tenant proper notice 24 hours prior to the inspection. When you own your home, nobody is entitled to enter without your permission. It is your personal space on the planet that you have final say over. Your home is your private sanctuary for you and your family.
6. Freedom. Do you want to build a tree house in the backyard for your children? Would you like a volleyball net to use for weekend games with friends? Want to have a large 4th of July celebration for 100 of your closest friends? Being a homeowner provides the freedom to do these things and virtually anything else that is legal to do. You do not have a landlord telling you what you cannot do. The freedom is priceless.
So Why Wait? Buy Your First Home!