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The Advantages of Home Ownership

John Doe Higher Learning University Prof. Jones, Economics 101. The Advantages of Home Ownership. Appreciation, Equity and Pride. Appreciation: Homes accrue in value over time Equity: As the mortgage is paid off, an owner builds equity which can be borrowed against in the future

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The Advantages of Home Ownership

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  1. John Doe Higher Learning University Prof. Jones, Economics 101 The Advantages ofHome Ownership

  2. Appreciation, Equity and Pride • Appreciation: Homes accrue in value over time • Equity:As the mortgage is paid off, an owner builds equity which can be borrowed against in the future • Pride:The pride and security of ownership is the main reason that people buy homes

  3. Tax Advantages • Tax Reports:Interest on mortgages can be deducted on tax reports • Income Tax:Property taxes paid on real estate that is considered a first home or a vacation home are fully deductible • Capital Gains Tax:If you have lived in your home two to five years and it has accrued in value, either 250K for an individual or 500K for a couple can be excluded from capital gains.

  4. Credit, Stability and Other Issues • Establishes Credit:When you buy a home and make your payments on time, it can help you establish strong credit. • Stable Housing Costs:While the prices of rent can inflate, the payments with a fixed APR mortgage stay the same. This makes saving and budgeting easier. • Other Taxes:If your capital gains profits exceed the previously discussed limits, this is a capital asset and is treated preferentially by the IRS.

  5. Works Cited • Weintraub, Elizabeth. 2008. “Look at Eight Reasons to Buy a Home.” About.com. Retrieved April 19, 2008 from: http://homebuying.about.com/od/buyingahome/bb/buyhome.htm. • “First Time Home Buyer: The Advantages of Home Ownership.” 2008. Home Loan Center. Retrieved April 19, 2008 from: http://www.homeloancenter.com/HomePurchase/FirstTimeHomeowners.aspx. • “Should I Rent or Buy? “ n.d. Retrieved April 19, 2008 from: http://www.whyrent.ca/.

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