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The Benefits of Home Ownership
Pride of Ownership
Pride of ownership is the number one reason why people yearn to own their home. It means you can paint the walls any color
you desire, turn up the volume on your CD player, attach permanent fixtures and decorate your home according to your own taste.
Home ownership gives you and your family a sense of stability and security. It's making an investment in your future.
Appreciation
Although real estate moves in cycles, sometimes up, sometimes down, over the years, real estate has consistently appreciated.
The Office of Federal Housing Enterprise Oversight tracks the movements of single family home values across the country. Its House
Price Index breaks down the changes by region and metropolitan area. Many people view their home investment as a hedge against
inflation.
Property Tax Deductions
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.
Morgage Reduction Builds Equity
Each month, part of your monthly payment is applied to the principal balance of your loan, which reduces your obligation. The way
amortization works, the principal portion of your principal and interest payment increases slightly every month. It is lowest on your
first payment and highest on your last payment. On average, each $100,000 of a mortgage will reduce in balance the first year by about
$500 in principal, bringing that balance at the end of your first 12 months to $99,500.
Equity Loans
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.
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