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Benefits of Home Ownership

 

By John J. Stahl III, The Coastal Bank

After the major housing market decline our nation experienced over the last several years, many Americans questioned whether or not home ownership is appropriate for their particular financial situation.

There are many reasons why owning a home may not be the right move for your present circumstances, which can include an unstable job situation or low cash reserves for a down payment, damaged credit. In some instances, home ownership may be too large of a personal or financial commitment.

On the flip side, home ownership can be a highly-beneficial solution for long-term financial goals. For example, home ownership builds home equity. Each month, a portion of your mortgage payment pays down the loan balance, which essentially means you owe a little less and own a little more of your home each month. In addition, home equity increases as the market value increases, which can happen organically over time or as a result of a home improvement project such as updating the kitchen.

Owning your own home can also offer significant tax advantages such as the ability to deduct annual home mortgage interest and state and local property taxes. In addition, the interest on a home equity loan may also be tax-deductible.

If you plan to live in your home for at least five years, a fixed rate mortgage will provide a controlled and stable monthly mortgage payment for the entirety of the loan, which means your monthly payment will never change unless you choose to refinance at a lower interest rate in the future.  Also, fixed rate mortgage loans come in several different term options, including 10-, 15-, 20- or 30- year mortgage loans.

While the aforementioned home ownership benefits will prove beneficial to your long-term financial goals, there are a myriad of other more uplifting reasons to own a home. Home ownership fosters a sense of security for your family and creates a feeling of community by investing in the neighborhood.  Owning a home also gives you the freedom to control the maintenance and aesthetics of the property – both of which are denied in a traditional rental agreement.

Home ownership should not be taken lightly. It’s a serious commitment. That’s why it’s highly advisable to consider the pros and cons of home ownership carefully before making any permanent decision.

If you’re planning on purchasing a new home, now is a good time to meet with your mortgage lender to create a plan to ensure your finances are in the best possible shape before securing a mortgage loan.

John J. Stahl III is the Mortgage Director and Senior Vice President at The Coastal Bank. He can be reached at (912) 201-7365 or jjstahl@thecoastalbank.com.



   

Written by: John J. Stahl III
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