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Monday, January 23, 2017

How Owning a Home Increases Your Wealth

How can you grow your wealth through homeownership? I’ll go over four different options for you today.

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One of the major benefits of owning a home is getting to build your wealth. How can you grow your wealth using your home? There are a few different ways:

1. Long-term homeownership builds wealth. When you use a mortgage to buy your home, the longer you own the home, the more of that mortgage you pay off. When you first start paying a mortgage, you are primarily paying interest. Over time, however, you start to pay off more principal, and as the principal adds up, you have more long-term wealth in your property.

By paying off your mortgage,
you build long-term wealth.

2. Homeownership lets you claim certain tax deductions which are not available to renters. You can write off your property taxes and the interest that you pay off each month.

3. You can take out a home equity line of credit. You can use that line of credit to refinance your car or student loans or even to make improvements to your home, like adding a new kitchen. You are also allowed to write off the interest from your home equity line of credit.

4. You can take advantage of capital gains. If you are a single person and you have lived in the home as a primary resident for at least two years, then you can make up to $250,000 on your home sale without paying any taxes.  If you are married, that number doubles and you can make $500,000 on your home sale.

There are many financial benefits to homeownership. If you have any questions about buying a home or about our local real estate market, give me a call or send me an email. I would be happy to help you!

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