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Owning Makes The Most Financial Sense

Owning Makes The Most Financial SenseEveryone has their own reasons for wanting to purchase a home, whether it’s simply to no longer have to rent, to have a place that they can make their very own or because they need more space; there’s one main reason behind every home purchase. One reason that many potential buyers may not think of when deciding to purchase a home is that it financially makes sense. The Joint Center of Housing Studies at Harvard University recently released a study on homeownership that outlined a few different financial reasons that people should purchase a home.

Purchasing a home is the only investment in which you can borrow money to make a profit. Many banks obviously won’t lend you money to purchase stocks or bonds but they will lend you money to purchase a home which you can then earn equity on. Also in terms of equity, whether you own or rent you’re paying a mortgage, either your own or your landlord’s; however when you own a home you’re paying towards your own mortgage and building your own equity instead of helping your landlord build theirs. Many people also don’t realize that when they’re paying their mortgage it’s viewed as a form of “forced savings”, meaning that the equity they’re building over time can be used later on in life.

There are also a number of tax deductions that go along with owning a home. Did you know that you can deduct your property taxes and mortgage interest? If you’ve made improvements to the home, such as energy efficient upgrades, some of these may be deductible on your tax return as well.

Lastly, when you own a home with a fixed-rate mortgage, you lock in your mortgage payment for the duration of your loan; this isn’t possible with renting. It’s pretty much guaranteed that your rent will continue to increase the longer you choose to rent instead of own.

No matter what your reason for wanting to own a home, it clearly is financially better for people to own. If you want to start building equity and secure a sound financial future for you and your family the obvious alternative is to purchase a home rather than continuing to rent.