- Property Tax Deductions – For income tax purposes, real estate property taxes for a vacation home and first home are fully deductible. The IRS (Publication 530) provides detailed tax information for first-time buyers that may answer many questions about what deductions homeowners are eligible for.
- Preferential Tax Treatment – If you own your home for more than a year and receive more profit than the allowable exclusion after the sale of your home, the profit will be considered a capital asset. Capital assets are given preferential tax treatment.
- Equity Building – Many factors such as credit qualification, loan flexibility, and annual percentage rate (APR) contribute to the final decision of what type of mortgage loan best fits your goals. Yet, a new trend being used by some homeowners is to actually add money to their monthly payment to decrease the principal balance of their loans at a much faster pace. This trend is called equity building. Equity builders usually select a home loan with a lower interest rate (and a shorter term loan such as a 15-year fixed) to help build equity faster. This rapid payment process allows borrowers to:
- Pay off the principal balance faster
- Lock in near-record-low interest rates
- Shorten the length of their home loan
- Own their home faster
- Pay substantially less mortgage interest
- Pride – Homeownership offers many benefits to many different types of people. For some homeowners, playing your music as loud as you want and painting the walls the color of your choice is a perk. For me, homeownership will permit me to build an NBA regulation size basketball court on my own property. For my coworker Joel Jarvi, home ownership may allow him to build the indoor slide of his dreams. No matter who you are, homeownership is a purchase, commitment, and journey that’s sure to bring you pride.
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