|
 |
|
|
Should
I Own a Home?
 Do
your upstairs neighbors stomp
on your ceiling? Do the meatballs
they're cooking next door fill
your apartment with the smell
of searing meat? Perhaps you long
to sit quietly in your own backyard
after a long day. Buying a home
is a big step, but maybe you're
closer than you think.
For the vast majority of us, owning
a home is part of the American
Dream. According to a study conducted
by the NATIONAL ASSOCIATION OF
REALTORS®, 87% of those polled
cited owning a home as the number
one criterion for defining "the
good life." Owners and renters
alike considered homeownership
desirable for the following reasons:
Pride of ownership
Their dislike of paying rent
The ability to change features
of their homes to
match their individual tastes
and needs
Like Mom and apple pie, owning
your own home provides a sense
of security and well being that's
hard to beat. Home is where we
raise our families, have friends
over for summer barbecues, paint
the baby's room pink or blue,
and find refuge from the outside
world.
In addition to these intrinsic
benefits, owning a home offers
other advantages as well. For
instance, as a homeowner, you
have control over your environment.
Not only can you change your home
to meet your needs, but you also
aren't subject to the terms of
a lease or a landlord. As a homeowner,
you can experience the emotional
and financial security that comes
from knowing what your housing
expenses will be from year to
year. Unlike rents, which can
increase annually, most mortgages
have fixed or capped monthly payments.
So, as a homeowner, you can have
a much better idea of what proportion
of your paycheck goes toward your
home. Think of it as the ultimate
savings plan--it sure beats a
passbook.
|
Bottom-Line
Benefits
 And
it only gets better. Homeownership
is the primary component in the
creation of wealth for many Americans.
(Data from Harvard University's
Joint Center of Housing Studies
illustrate not only that the median
net wealth of homeowners is 34 times
greater than that of renters, but
also that over half of that wealth
is generated from home equity.)
As you pay down your loan amount
each month, you accumulate equity,
a growing ownership interest in
your property. If you need funds,
you can borrow against this equity
in the form of a home equity loan.
Further, interest on a portion of
home equity is tax deductible.
Remember that most homes appreciate
in value over time and can be a
source of income for you, especially
if you've lived in your house for
many years. When you retire, you
can sell your home if you need the
funds or make use of a home equity
conversion mortgage. This type of
mortgage allows you to continue
to live in your home and receive
a monthly check at the same time.
In essence you are able to tap into
the accumulated home equity and
receive a monthly sum which reflects
the amount of that equity and the
number of years you wish to receive
that payment. In return for providing
you with the payments, the lender
receives an ownership interest in
the home. These mortgages sometimes
are called reverse annuity mortgages.
Ask your lender about them.
Finally, don't forget about the
significant tax advantages of owning
your home. Interest on a home mortgage
and property taxes are deductible.
For most of us, mortgage interest
provides the largest tax deduction.
Also, a home is the single most
important factor that determines
whether you will be able to file
a return that takes advantage of
the wide range of allowable itemized
deductions.
Home Buying Means Getting Back
To The Basics
 Recently,
the California Association of
REALTORS® surveyed homebuyers to
find out what they considered to
be important in the purchase of
their homes. The largest percentage,
27 percent, considered the mere
ownership of a home as the most
important reason to buy. Moving
to a better neighborhood (17 percent),
wanting a larger home (10 percent),
and realizing the tax advantages
of homeownership (8 percent) were
other reasons cited for buying homes.
Seven percent focused on investment
value as their primary motivation
for homeownership.
Over the years, your home likely
will be the best investment you'll
ever make. But more important, it
will be the place that offers you
and your family shelter, security
and stability. That's some return
on investment. |
|
|
