The Many Pleasures of Home Ownership
For many years, homeownership has been associated with “the American dream,” and for a good reason. As long as you are in a financial position to buy, there are many benefits that come from owning your own home. The following is just a partial list.
When you own, you can build a sense of place, a sense of stability for your family. My parents and my wife’s parents both kept the homes where we were raised for the rest of their lives. Returning to those homes for visits brought back lots of good memories. We hope to do the same for our kids with our home.
When you own, it can be easier to build community. You’re putting down roots and doing life, to a degree, with your neighbors. It’s more natural to feel a sense of connection with neighbors when you know you all plan to stick around for a while. In our neighborhood, we let each other know when we’re going to be gone, so we can keep a watch on each others’ homes, take out the garbage and recycling, and water outdoor plants.
Owning can cost about the same as renting
When I bought my first home, a small townhome, I was happily surprised to find that, after accounting for the down payment, my monthly expenses did not go up. Because of the tax benefits of being able to deduct mortgage interest and property taxes, I was able to have less money taken out of each paycheck for income taxes. While I had a new expense, property taxes, the savings on income taxes balanced that out.
A related point is that when you own, you gain some control over your housing costs. How much you pay in property taxes and homeowner’s insurance may go up each year, but a fixed-rate mortgage payment never will. And if you stay in your home long enough, eventually, the mortgage will be paid off. That can be especially beneficial once you retire from full-time work.
Long-term, owning is more profitable than renting. When you own, you build equity. Some of that equity could be tapped if needed via a home equity loan or line of credit that may be a lower-cost and more tax-advantaged way to borrow vs. other options. Or, if you decide to downsize in retirement, you may have enough equity to buy your next home with cash. Either way, you’ll be able to leave a valuable asset to your heirs.
At the beginning of this article, I stated a very important caveat: “As long as you are in a financial position to buy…” That means you have enough money for a down payment without draining your emergency fund, your monthly payments (mortgage, property taxes, and homeowner’s insurance) will be low enough that you are able to give generously and save and invest adequately, and your monthly budget contains a line item for home expenses and repairs (generally, at least $200 per month). If you can check each of those boxes, owning a home has every possibility of being a deeply satisfying experience.
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Matt Bell is the author of four Biblical money management books published by NavPress. He speaks at churches and conferences throughout the country and writes the MattAboutMoney blog.
This article should not be considered legal, tax, or financial advice. You may wish to consult a tax or financial advisor about your individual financial situation.