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A Few Reasons Why You Should Buy A Home

(Buying a home undoubtedly has many advantages, although with these advantages come many responsibilities and added obligations. )

If you are a first time home buyer, you probably could not have picked a better time to make your first purchase.

Mortgage rates are at all time lows and you have probably heard that it is a buyer’s market. Prices are slowly going down, and there is a tremendous amount of homes on the market to choose from.

If you haven’t quite yet decided whether to keep renting or make the big move to homeownership, you should read on and discover all of the benefits to homeownership.

A November 17, 2006 article by Elizabeth Weintraub of about.com, “Eight good reasons to buy a home,” lists all of the benefits and advantages associated with homeownership.

“The primary reason I bought my first home was to blast my stereo. After I moved in, I cranked up the music so loud that my cats were forced to cover their ears with their little kitty paws. But no neighbors banged on the walls or called the police to report me. I was ecstatic.”

Obviously blasting the stereo and drilling holes in the walls are just two small fun reasons why owning a home is so much better than renting, but there are many other bigger reasons as well.

Let’s look at the tax benefits first, because no one likes paying taxes, right?

There are property tax deductions, and you can even deduct your mortgage interest.

“Home ownership is a superb tax shelter and our tax rates favor homeowners. As long as your mortgage balance is smaller than the price of your home, mortgage interest is fully deductible on your tax return. Interest is the largest component of your mortgage payment.”

“IRS Publication 530 contains tax information for first-time homebuyers. Real estate property taxes paid for a first home and a vacation home are fully deductible for income tax purposes. In California, the passage of Proposition 13 in 1978 established the amount of assessed value after property changes hands and limited property tax increases to 2% per year or the rate of inflation, whichever is less.”

Another benefit to owning home deals with price appreciation and equity.

Not only is real estate historically known to appreciate in price over the years, but once you accrue equity, you can take advantage of home equity loans and lines of credit if you ever need cash.

“Consumers who carry credit card balances cannot deduct the interest paid, which can cost as much as 18% to 22%. Equity loan interest is often much less and it is deductible. For many home owners, it makes sense to pay off this kind of debt with a home equity loan. Consumers can borrow against a home's equity for a variety of reasons such as home improvement, college, medical or starting a new business. Some state laws restrict home equity loans.”

So owning a home not only gives you the chance to paint the walls purple, but also build wealth as well. Sounds like a win-win situation to me.

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