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C H A P T E R    M E N U
 ❑ Pride of Home Ownership
 ❑ Tax Benefits
 ❑ Appreciation of Value
 ❑ Home Equity
 ❑ Stability & Flexibility
Chapter01 Reasons to Buy a Home

If you have just started thinking about buying your first home, you maybe wondering if buying a home is the right thing to do for you.

Just like you, many first-time home buyers – especially singles and young couples who are just starting their careers – have mixed feelings about purchasing a house at first. They worry about getting tied down and taking on a lot of debt. But, don’t worry. Having reservations is quite normal.

The more you know about the benefits of owning a home, the less scary the entire process will appear to you. Here are 5 great reasons why anybody who can afford it should consider buying a home instead of keep renting.


Pride of Home Ownership
Pride of home ownership is the number one reason of all times why people yearn to own their home. The idea of owning property that can be passed down the generations (rather than paying for the use of someone else's property) is one of the main reasons many people go to work everyday in and day out, work two jobs, or work two or more shifts. It’s making an investment in your future. The sense of accomplishment comes with owning a house cannot be duplicated when renting.
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Tax Benefits
The second best reason to buy a home is the tax savings associated with owning a home.
It does not only allow you to deduct the mortgage interests (as long as your mortgage balance is smaller than the price of your home, up to a limit of $1 million!), you can claim property tax as an income tax deduction. This is huge. For many people, any other tax deductions cannot even come close. Owning a home also gives you the ability to itemize your deductions, which you may not have been able to do previously.
If you’re moving at least 50 miles closer to your job than your old home, you can write off your moving expenses as well. In this case, you must continue to work full-time in the general area of your job for 39 weeks during the following year to qualify for this deduction. If you’re self-employed and work in your home, any move of 50 miles or more will make your moving expenses deductible, although you must also work full-time near the new location for 78 weeks during the next 24 months.
In addition, once you have lived in your home for at least two of the previous five years, you don’t have to pay taxes on any profit you make when you sell your home. The law allows you to exclude from taxes up to $250,000 in profit from the sale of your principal home -- $500,000 for a couple who file jointly. However, you can only claim the exemption once every two years.
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Appreciation

Here, the word “Appreciation” refers to an increase in value of a property.

Even though real estate moves in cycles, sometimes up, sometimes down, over the years, the national median home price has been consistently risen -- even during recessions and periods of sales declines -- since 1968, when the NAR began tracking it. The Federal Housing Finance Agency tracks the movements of single family home values across the country. Its House Price Index breaks down the changes by region and metropolitan area. Many people view their home investment as a hedge against inflation.

More than likely, your house will be worth more in a few years than you paid for it. Even if the house you purchased did not appreciate in price, you would be able to sell it and recoup some of the money you put into it, whereas you absolutely cannot recoup any of the money you paid for rent.

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Home Equity

Each month, part of your monthly payment is applied to the principal balance of your home loan, which increases the portion of property that you actually own. This process is called “building equity in your home”.

Owning a home with more equity can become a good source for future credit and or financing. Homeowners are able to turn the equity that they have in their home into a loan or line of credit through refinancing. The biggest benefit of home equity line of credit is that the borrowers may get a tax deduction on interest paid for the loan, while credit card interest is not tax deductible. This benefit has proven to be important in a down economy or in emergency situations where medical bills are unmanageable, home repairs or improvements are needed, or kids need funds for college.

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Stability and Flexibility

These two words sounds like they mean the opposite, but they go together like a horse and carriage when it comes to owning a home.

Owning a home gives you and your family a peace of mind, a sense of stability and security, especially when you own a home in a good neighborhood. Many homeowners take time to meet and get to know their neighbors, and get involved in community activities and programs. Statistics show that neighborhood with more involved residents with strong sense of community are more likely to bring the crime rate down in the area.

Meanwhile, living in your own home gives you much more freedom with what you can do with & within your living space. It means you can turn up the volume on your CD player, paint the walls any color you desire, pick a tree and plant it to watch it grow for years, and attach permanent fixtures and decorate your home according to your unique taste!

In addition, owning a home can add much more flexibility to those who operate home-based business. Many home-based business owners find that it is much easier to convert an extra room in your home into a home office than it is in a rental or apartment setting, which can play a big role in the success of their business.

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Now you know the great benefits of buying a home, let us learn the basics of home buying before you actually start the search for your first home.

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