Here are the advantages of owning a home.

1. Long-Term Investment
Even if property values go up, your monthly mortgage payments remain the same. Considering that the average appreciation rate of real estate properties is 5% per annum, this is a sizeable increase in your original investment.

2. Tax Benefits
The IRS allows homeowners to deduct mortgage interest payments; this provides homeowners a significant deduction on annual tax payments. Moreover, you have the option to use your home equity to secure interest-deductible loans for home improvements or college education. In effect, the government helps to subsidize your purchase of a home.

3. Fixed Monthly Housing Cost
Your monthly amortization payment is fixed for the term of the mortgage loan. Compared to renting a home, owning one gives you peace of mind because what you pay for the monthly amortization will be the same amount fifteen years from now, especially if you take out a fixed rate mortgage where you are guaranteed one monthly amount for the next fifteen to thirty years.

Preparatory Guidelines to Purchasing a New Home

-Avoid any major purchases before buying a new home. Make sure that you can use all of your financial resources towards the home acquisition and moving-in costs.

-Make sure you have a long-standing banking relationship. Preferably, you should consolidate all your deposits in one bank. You will be required to submit bank statements for at least the past three months.

-As much as possible, don’t change jobs or change employers while you are awaiting a loan approval to buy a home. Lenders like to see continuity and stability when considering a mortgage approval. Job variables such as commissions, bonuses, and job security can come into play and decrease your credibility to the lender.