The Financial Benefits of Owning a Home

The journey towards owning a home is filled with hight hopes and hard work. While many find it daunting, working towards owning a home incredibly important. For most people their home will become their largest financial asset. They may cost a significant amount of money, but that doesn't mean people should put off this milestone. Here are some of the financial benefits of owning a home: 

Forbes writes, "your equity in your home is the amount of money you can sell it for minus what you still owe on it. Every month you make a mortgage payment, and every month a portion of what you pay reduces the amount you owe. That reduction of your mortgage every month increases your equity." This equity can be leveraged to help finance and back other endeavours. Forbes notes, "paying that mortgage every month and reducing the amount of your principal is like a forced savings plan. Each month you are building up more valuable equity in your home. In a sense, you are being forced to save—and that’s a good thing."

There are tax benefits of owning a home that can also save you money. Manulife writes, "when Canadians think of the perks of owning a home, homeowners' tax credits might not be the first thing that springs to mind. But homeownership could mean qualifying for tax credits, rebates, or benefits that can put cash in your pocket — cash that can go toward savings, paying down debt, or wherever else you need it. This tax season, consider investing some time and effort into researching homeowners' tax breaks."

Your home is likely to also only appreciate in value. This means that assuming you are able to wait to sell in ideal conditions, you will likely be able to sell her home for more than you paid for it. Insider writes, "Houses generally go up in value over time. For example, according to the Price-Shiller Index, the price of existing homes increased 3.4% annually from 1987 to 2009, on average. After 30 years, a $200,000 becomes a $545,313 house. That’s a 172.7% increase. A $500,000 house today at an annual appreciation rate of 3.4% interest rate becomes a $1,363,283 house in 2044."

Have questions? Call Ken Richter directly today ay 403.630.6363

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