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The 3 Primary Benefits of HomeownershipEntire generations of citizens have been raised to believe that homeownership is an essential part of life, a necessary step on the road to success and happiness. Arguably, the ideal of owning a home has been one of the major staple ingredients of the traditional American Dream. Very few cultural goals are accepted as universally across our nation as this one is, and with good reason. There are many benefits associated with home ownership. But recent financial and economic events have led many potential buyers to conclude that the costs outweigh the benefits. The standard home purchase plan, with the associated 30 year fixed rate mortgage, is now out of reach for many Americans. Are there still benefits to owning a home? The answer is yes. Homeownership remains one of the most valuable propositions available to most buyers for the following three reasons. Family stability. When you own a home, you tend to stay in it longer and make more long term financial decisions. The end result of this lifestyle, which some refer to as "settling down," is that it provides a safe, secure, stable home environment for you and your family. Children are likely to benefit more in such a home context than otherwise. Family stability is often cited as a good reason to purchase a home. It is by no means the best reason, though. Tax benefits. Though some of the tax benefits of home ownership have recently been called into question and placed in legislative jeopardy, many persist. Mortgage interest may be deducted from your income taxes, softening the damage done if you weren't able to get one of the lowest mortgage rates. Property tax payment amounts may be deducted as well. If you own your home for more than a year and then sell, you can exclude the profit you make from capital gains taxation. These are just some of the more common tax benefits provided to homeowners. Investment value. By far the most commonly cited benefit to homeownership, and arguably the one that has been most ardently questioned in recent years, is the investment aspect. When you purchase a home, much of the money that you spend on it is stored as home equity in the reservoir of your property's value. This value can be held indefinitely and can be tapped when needed through a refinance or sale. Though many homeowners have lost money in recent months on their homes due to declining property values, most homes increase significantly in value over the long term, and history has borne this out. Despite questioning, your home is likely still a good investment if you plan to keep it for the long term. |
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