7 REASONS TO OWN YOUR OWN HOME
* TAX BREAKS
The U.S. Tax Code lets you deduct the interest you pay onyour mortgage, property taxes you pay, as well as some of the costs involved inbuying your home.
These tax deductions greatly increase the financial benefitsof home ownership. Here's how it works.
Assume:
$9,877 = Mortgage interest paid (a loan of $150,000 for 30years, at 7 percent, using year-five interest)
$2,700 = Property taxes (at 1.5 percent on $180,000 assessedvalue
_________________
$12,577 = Total deduction
$3,521.56 = Amount you have lowered your federal income tax(at 28 percent tax rate)
(12,577 X .28 = $3,521.56)
Note that mortgage interest may not be deductible on loansover $1.1 million. In addition, deductions are decreased when total incomereaches a certain level.
* GAINS
Historically real estate has always been one of the bestinvestments available. On average, homes in the Atlanta area have increased invalue between 4% and 5% annually....
You may say - that's not such a great investment. But, weneed to look closer at the total picture. Let's look at an example.
If you bought a $200,000 house, you didn't pay all cash forthe home. You got a mortgage, too. Suppose you gave a 10% down payment - thatwould be an investment of $20,000.
At an appreciation rate of 5% annually, a $200,000 homewould increase in value $10,000 during the first year. That means you earned$10,000 with an investment of $20,000. Your annual "return oninvestment" would be a whopping 50% percent. Now that's a great return!
* EQUITY
Money paid for rent is money that you'll never see again,but mortgage payments let you build equity ownership interest in your home.
* SAVINGS
Building equity in your home is a ready-made savings plan.And when you sell, you can generally take up to $250,000 ($500,000 for amarried couple) as gain without owing any federal income tax.
* PREDICTABILITY
Unlike rent, your mortgage payments don't go up over theyears so your housing costs may actually decline as you own the home longer.However, keep in mind that property taxes and insurance costs will rise.
* FREEDOM
The home is yours. You can decorate any way you want andbe able to benefit from your investment for as long as you own the home.
* STABILITY
Remaining in one neighborhood for several years gives youa chance to participate in community activities, lets you and your familyestablish lasting friendships, and offers your children the benefit ofeducational continuity.