Tax breaks. The U.S. Tax Code lets you deduct the
interest you pay on your mortgage, property taxes you pay, and some of
the costs involved in buying your home.
Gains. Between 1998 and 2002, national home prices
increased at an average of 5.4 percent annually. And while there’s
no guarantee of appreciation, a 2001 study by the NATIONAL ASSOCIATION
OF REALTORSÒ found that a typical homeowner has approximately
$50,000 of unrealized gain in a home.
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 a married couple) as gain without owing any federal income
tax.
Predictability. Unlike rent, your mortgage payments
don’t go up over the years 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 and be able to benefit from your investment for as long as you
own the home.
Stability. Remaining in one neighborhood for several
years gives you a chance to participate in community activities, lets
you and your family establish lasting friendships, and offers your children
the benefit of educational continuity.
To calculate whether renting or buying is the best financial option for
you, use this calculator courtesy of Ginnie Mae:
