Owning a home is a dream that many people aspire to achieve. It’s not just about having a place to live; it’s about security, stability, and building wealth over time.
In this article, we will delve into the benefits of owning a home, going beyond the obvious to explore the financial, emotional, and social benefits that come with homeownership. If you are looking to purchase a home in the near future, this blog is for you.
Building wealth through equity
There are two main ways of building your wealth through your home’s equity. That is property appreciation and mortgage payments.
Property appreciation is one of the main monetary advantages of home ownership. Real estate typically appreciates in value over time. This implies that the house you buy today might be worth more in the future, enabling you to accumulate more equity and personal wealth over time. The appreciation of your home’s equity means you may have more money to spend on things like renovations or luxuries like a new car.
Your loan balance is reduced with each mortgage payment you make. As a result, you gradually own a larger portion of your home outright. It’s like a forced savings strategy that increases wealth.
Having a home to call your own allows you the freedom to do what you want with the place. You can decorate, renovate, and change your house as you please, without needing permission from a landlord. Your home can be your canvas, reflecting your unique personality and style.
Security of home ownership
Renting a home can be stressful for many tenants as landlords have the power to evict you for a variety of reasons. Owning a home gives you the security of moving in and out when you decide the time is right. This gives stability to families and allows children to stay in one place, attend one school, and form lasting friendships.
Mortgage payments are also more stable than renting as landlords can increase rents at their own discretion. Stable repayments give homeowners a sense of security as they generally know what their payments will be every period.
Your home can be used strategically for investment purposes. Once you have paid down part of your home, you can leverage your home’s equity to invest in opportunities. You can take the equity out of your home to purchase other investments such as investment property, stocks, or even to start your own business.
This can be very risky if you do not know what you are doing, consult with a professional such as a financial advisor before taking any action. This strategy can assist with building wealth over a long period of time. There are many risks to deploying a wealth generation strategy such as this.
In some circumstances, your home can provide you with tax benefits that can help your financial situation. For people who work from home, you can typically claim working-from-home tax deductions. Costs that have occurred whilst working such as utility bills and maintenance costs can be claimed to lower your overall tax liability. This does depend on how you claim the working from home tax deduction and how you use your property.
If you own an investment property, you can deduct the expenses you incur on the property. For an in-depth look into the deductions, you can claim on investment properties, check out our blog, here.
Are you looking for a mortgage broker?
If you are looking for a new home, One Click Life can help you find a lender that meets your needs, whilst saving you more money. We are a mortgage broker that has a team of expert professionals to help you choose a mortgage that suits you. One Click Life can also look after your Health Insurance, Will, and Taxes so you can focus on the things that matter to you.