Why buy a home?
1. Opportunity to build equity
Aside from having a roof over your head (your own roof), the ability to build equity is one of the most valuable benefits of home ownership. Each monthly mortgage payment you make helps you build equity and brings you closer to owning your home outright. Home improvements that increase the value of your property may also add to your equity. And, if property values in your area rise, which they historically do long term, your equity will too.
2. Possible appreciation
Most large purchases, like cars, boats or electronics, go down in value as soon as you purchase them and more so as they age. Conversely, a home usually increases in value over the years, especially if it’s been well maintained. And if your home’s value has increased substantially by the time you’re ready to move, you may be able to profit from its higher resale price.
Once you build up equity in your home, you can benefit from a new source of borrowing through home equity loans and lines of credit, and getting cash-out through refinancing. Home equity loans — loans that are leveraged against the value of your house — are usually offered at a lower interest rate than conventional loans because they represent a lower risk to the lender because the property is used as collateral. In some cases you may even be able to borrow more than what your home is worth when you want to upgrade your home.
Home ownership does require you to pay some extra fees, such as property taxes and interest on your mortgage balance. But fortunately, both of these expenses are usually tax deductible.
As a homeowner, you can often exercise greater control over your housing costs than renters. For example, you may choose to lower your monthly utility bills by reducing your energy consumption. This may not be possible as a renter if utility charges are bound up in your rental payment. Also, when you own your own home, you have more freedom to renovate as you choose without worrying about restrictions set out in a rental agreement. Plus, any upgrades you make may eventually pay off by increasing the resale value of your home.
Finally, home ownership has plenty of non-financial benefits, too. When you own a home, it’s yours. You can do what you want with it in terms of decorating, gardening or renovating or making the choice to have a pet or even a roommate to rent out an extra bedroom. Do you want to have friends and family over? It’s all up to you. Remember, you not only own the house, but the land it sits on. There are few things as empowering as knowing that there’s a piece of the world that you own and are sitting on; a place you can truly call home.