Benefits of Owning Your Own Home

Despite the ups and downs of the past year, the housing market has remained strong, particularly in Arkansas. The demand for homes has outpaced supply, pushing the median value of homes up along with prices. Low interest rates have also encouraged this healthy market, allowing buyers to really take advantage this year. There are many benefits of owning your own home, but the three will build equity, build credit and award you more control over your home.

Owning Your Home Can Build Equity

The clearest reason to own your own home is that it will build equity in the long run. When you buy a home, your mortgage rate is often locked into a long-term contract to be paid in monthly installments for either a 15 or 30-year term. If you’ve chosen a fixed-rate mortgage, that monthly payment never goes up, despite inflation. Insurance and taxes could change, but the payment you make toward your own home every month will not. This means as you pay down the loan over time, you’ll be paying less and less relative to the rising cost of homes.

Your home is also an appreciating asset. It can likely gain 3 to 5% in value each year you own it. For example, if you stay in your home for five years, the house could have increased enough in value to cover any costs you’ve incurred in purchasing the home. From this point, you’ll only increase your profits when you do choose to sell.

As you spend money to upgrade items like appliances, roofing, siding or even remodeling, you’re adding to the value of the home.

Owning Your Own Home Builds Credit

Even though home loans aren’t the main source to build credit, paying back your mortgage in a timely manner builds and sustains your positive credit history. Additionally, as you pay down your mortgage you build up equity in your home. This equity is an asset that may be able to be borrowed against in the form of a line of credit because lenders view it as fairly strong collateral for the loan. While lines of credit should be used judiciously, the financial flexibility they provide a homeowner is strong.

Building credit isn’t the only benefit. In order to encourage homeownership, the IRS provides many tax benefits in the form of both deductions and credits. Your real estate taxes and mortgage interest are tax-deductible. When you rent, your landlord uses some of the rental income to pay interest and taxes. They get tax breaks on those payments, but you, as the renter, do not. Being a homeowner allows you to take full advantage of these tax breaks.

Another outside benefit to homeownership is through auto insurance. Many insurance providers view homeownership as a sign of stability, which is reflected in lower auto insurance rates. Many insurance providers will provide a further discount if you bundle both your home and your auto policies, increasing your savings, all because of homeownership.

Owning Your Own Home Awards You More Control Over Your Home

There are benefits outside of financial ones to owning your own home. When you own your home, you’re in charge. You don’t have to worry about moving if the landlord decides to change the rental situation. You can update and remodel your home as you see fit. Owning your home can give you greater peace of mind based on a more secure living situation.

If you think you’re ready to buy a home, or perhaps find a new one, visit First Security Mortgage to get started. With mortgage specialists in over 78 locations across Arkansas, we’ll help you buy your home with competitive rates and the financing options available, so you can take advantage of the many benefits of owning your own home.

*Tax Disclaimer:

Meet the author

A little about Kimberly Mitchell

Kimberly S. Mitchell loves journeys, real or imagined. She has hiked the Inca Trail, walked into Panama on a rickety wooden bridge and once missed the last train of the night in Paris and walked several miles home (with friends). She believes magic can be found in life and books, loves to watch the stars appear, and still dreams of backpacking the world. Now she writes adventures to send her characters on journeys, too. Pen & Quin: International Agents of Intrigue – The Mystery of the Painted Book is her debut novel. Find out more at KSMitchell.com.