Some potential buyers who arrive at our model homes for tours are first-time homebuyers, ready to leave renting behind and put down roots. The leap from renting to owning a home requires a lot of courage and involves a steep learning curve. Our sales staff at Ash Creek Homes loves helping buyers navigate the ups and downs of homeownership.
Many people aren’t aware of the significant financial advantages of owning a home. Some believe renting for another year or two will save them money; however, owning a home has the potential to save money over the long term. Today, we’d like to share a little about that on the blog. Some of this information is courtesy of one of our experienced lenders, Todd Turlington from Mortgage Lending Solutions. We are very grateful for Todd’s expertise!
If you find this helpful, please pass this on to anyone you know who owns a home or is considering buying their first home.
- Tax Deductions: Homeownership offers various tax deductions that can help reduce your taxable income. Homeowners can enjoy significant savings come tax season by deducting mortgage interest, property taxes, and mortgage insurance premiums.
- Appreciation: Historically, real estate in the Austin area has increased in price by 10% each year. This appreciation can lead to substantial gains in home equity and often outpaces any money saved by renting. Additionally, a buyer who chooses to rent for another year to see if mortgage rates will go down may find that the houses they could afford this year are out of reach once they cost 10% more next year, particularly once they add the higher property taxes caused by the price increase.
- Equity Building: Unlike renting, where your monthly payments contribute solely to your landlord’s bottom line, homeownership allows you to build equity with each mortgage payment. This equity can be a valuable asset, providing financial stability and flexibility in the future.
- Tax-Free Profit: One of the most enticing perks of homeownership is the potential for tax-free profit when selling your primary residence. If you’ve owned the home for over two years, you can exclude up to $250,000 in capital gains (or $500,000 for married couples) from your taxable income, making homeownership an attractive investment opportunity.
- Stable Monthly Payments: In growing cities like Austin, rent costs often increase yearly. Your mortgage payment, however, remains the same. Sometimes, mortgage payments can be lower than rent payments for the same square footage, so running the numbers with a mortgage lender is always a good idea.
- Closing Cost Assistance: Sellers may offer to pay a portion or all closing costs, further reducing the upfront expenses of buying a home. For example, if you use one of our preferred lenders at Ash Creek, your title costs are always covered.
Ultimately, whether renting or buying is the better option for someone depends on various factors, including their financial situation, long-term goals, and personal preferences. But if you’re ready to explore the benefits of purchasing a new home, visit us at Tanner Ranch in Cedar Park. We’d love to build the home of your dreams!
