First Time Home-Buyers

Just some of the homeownership benefits.

The Best Investment.

Generally, homes appreciate about five percent a year. Some more, some less. The figure can vary from area to area. While that might not sound like much, consider this example: If you bought a $200,000 house, you didn’t pay cash. You got a mortgage, too. If you’re able to put down as much as 20 percent, you’ve invested $40,000.

At an appreciation rate of 5% annually, a $200,000 home would increase in value $10,000 during the first year. That means you earned $10,000 with an investment of $40,000. Your annual "return on investment" would be a whopping twenty-five percent.

Of course, you are making mortgage payments and paying property taxes, along with a couple of other costs. However, since the interest on your mortgage and your property taxes are both tax deductible, the government is essentially subsidizing your home purchase. Your rate of return when buying a home is higher than most any other investment you could make.

Income tax savings and more.

Some people are just lousy at saving money, and a house is an automatic savings account. You accumulate savings in two ways. Every month, a portion of your payment goes toward the principal. In the early years of the mortgage, this is not much. Over time, however, it accelerates. Renting gives you nothing to show for.

Second, your home appreciates. Average appreciation on a home is approximately five percent, though it will vary from year to year, and in some years may even depreciate. Over time, history has shown that owning a home is one of the very best financial investments.

Freedom and Individualism.

Renters are typically limited on what they can do to improve their living space. Getting permission from the owner to make changes is often an uphill battle. Nor does it make sense to spend thousand of dollars painting, putting in carpet, tile or window coverings when the main person who benefits is the landlord and not you.

When you own, however, you can do pretty much whatever you want. You get the benefits of any improvements you make, plus you get to live in an environment you created.