You want to build equity because it is one of largest sources of net worth for an individual and can be borrowed against if you need it in the future. You build equity on a home as you pay off your mortgage. Home equity is the value you own on your property calculated by the current market value minus what you owe on the mortgage. Value builds over time as the property appreciates and you pay off your mortgage – and property values are increasing as the housing market heals along with the economy. Why keep throwing your money away on rent when you could start putting it toward investment in your future?
2. Mortgage Rates Are Low
Interest rates for 30-year fixed rate mortgages are around 4.3 right now which is historically low. They've been rising for the past year or so but they’re still below the average or 6 or 7%. Now is the time to secure your rate, chances are they’re only going to rise as the economy continues to heal and normalize.
3. It’s Cheaper!
Rent is on the rise in California and you don’t want to spend your money year after year with nothing to look forward to except further inflated pricing. Most home buyers choose a 30-year fixed rate mortgage which means they will pay the same rates no matter inflation for the entire duration of their loan. And the more money you put down, the lower your payments are. The best thing to look forward to? Once you pay off your mortgage, you’ll no longer have monthly "rent" payments.
4. Tax Benefits
There are many tax benefits available to home owners like deducting the interest on your mortgage and property taxes from your income tax. It’s daunting that for the first few years of your mortgage payments, most of the payment will be going toward interest and not principal. Lucky for you, that means the majority of your first payments will be tax deductible. So whether it's toward rent or toward a mortgage, you're going to have monthly bills - why not make it a payment that's tax deductible? There are also tax benefits in the form of capital gain exclusions when you sell your home. Capital gain exclusions mean that you could qualify to keep up to $500,000 of the profit when you sell your house before you have to pay a dime in taxes to the government. That's an arm and a leg more than you'll get to keep compared to other investment gains.
5. Having A Place To Call Home
Home is more than just 4 walls and a roof; it’s a feeling you get when you’re settled and when you can call a place your own. There is so much uncertainty involved with renting. You never know when it might be time to relocate because of rising rents, difficult landlords or any number of circumstances which are out of your control. Owning a house just feels good because it gives you control over your home and what you want to do with it too. When you own a home you have the freedom to paint the walls whatever color you want, put holes in them to hang your favorite art and décor, have whatever kind of pet you want and so much more. Why wait any longer to start living life the way you want to?
Now take a peek at some real estate, you know you want to.
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