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How Homeownership Can Build Wealth

October 15, 2022

Buying a home is a major investment, but it’s still ultimately an investment in your future. The thought of homeownership is daunting for some, but it makes more sense in the long run than renting. Emotionally and financially, there’s a sense of stability when you own your own home. Of course, with prices rising, it can sometimes seem like owning a home will remain a dream, but you may be surprised. Look at your financial health and get the help of one of our experienced Realtors in Columbus GA. We can help you find a home that fits your budget and starts you on the way to greater wealth.

By owning a home, you are able to build equity. With every mortgage payment, you gain more value from your home as it comes closer to being yours outright when you eventually pay it off. As a renter, you get nothing back for the money you pay out each month. In some cases, you may be paying more in rent than you would for a mortgage. While there are challenges involved in meeting the requirements for a mortgage, if you can get one and are willing to perhaps start smaller with your first home, you can start to build up equity. If you stay in that first home for five to ten years or more, you can start to develop real equity when you decide to sell. Even though you haven’t paid off the mortgage, you will get some money out of the deal, which you can use to put toward your next home, perhaps sizing up, moving to a better neighborhood, and/or getting a better rate on your next mortgage. That first home sets you up to make more money eventually off your home.

In addition, that first home you purchase may increase in value during the time you own it. Depending on the housing market and any improvements you make, and how desirable your neighborhood is, you could receive more for your home than you initially paid. This adds to the money you can then put toward your next home. Home values tend to increase each year, if conditions are good. Of course, rent prices also increase, making it harder for you to afford and with nothing to show for it if you are forced to move out. With a home, you can have your home appraised and cash out when it reaches a solid amount over your initial purchase price, increasing your wealth.

Finally, in some cases, there are tax benefits from home ownership. You may be eligible for mortgage interest deductions and other tax deductions. There are certain benefits, depending on brackets, which are designed to help increase the number of homeowners, so be sure to take advantage of any that may save you money, once again increasing your wealth.

Owning a home is expensive in the initial purchase phase and, of course, you’re responsible for paying for all maintenance and repairs, which can sometimes be expensive. Yet if you’ve been working to have a solid credit score and have some money for a downpayment, there are also various mortgage options, including FHA loans and VA loans, among others, that can help you get started on the road to increased financial wealth through the benefits of owning your own home. If you think you’re ready and want to learn more, contact one of our helpful Realtors in Columbus GA to learn more about the options and homes available to you.

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This post was written by Rose Anne Erickson

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