Why Should You Own Your Own Home?

1. Tax breaks.
The U.S. Tax Code (if you itemize) lets you deduct the interest you pay on your mortgage, the property taxes you pay, and some of the costs involved in buying your home. New in 2007, homeowners earning under $110,000 adjusted gross income can deduct, for the 2007 tax year only, some or all of the PMI premium on mortgages closed only in 2007. Congress would need to renew this deduction to be valid for any tax years beyond 2007. (Consult with your attorney or tax accountant.)

Note: the Mortgage Debt Cancellation Relief Act  extends the PMI deduction for mortgage insurance premiums through tax year 2010.

If you take out a home equity loan, the interest on that loan is also deductible - and it doesn't matter how you spend the proceeds of the loan.

Your profit from selling your home may be considerable. When you sell your primary residence, the profit on the sale is free of capital gains tax up to $250,000 if you file as a single individual, and $500,000 if you're married and file jointly. Any profit above that will  nearly always be taxed at 15% — or less if your  tax rate is bracketed less than 20%.

A final  tax advantage, often overlooked, is that owning a home opens the doors to itemize your tax return. If you itemize you'll find that you can now deduct many other items that are not available to you taking just the standard deduction.
 

See also:

• Good Tax Deductions: Homeowners Can Reap Benefits
• Tax Benefits Of Home Ownership.
• How do you choose between buying and renting?

2. Appreciation.
Between 1998 and 2002, national home prices appreciated at an average of 5.4 percent annually. And while there’s no guarantee of appreciation, a 2001 study by the NATIONAL ASSOCIATION OF REALTORS ^® found that a typical homeowner has approximately $50,000 of unrealized gain in a home.
 
3. Equity.
Money paid for rent is money you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

4. Savings.
Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
 
5. Predictability.
Unlike rent, your mortgage payments don’t go up over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes, insurance costs, as well as cost of repairs may rise.
 
6. Freedom.
The home is yours. You can decorate any way you want and be able to benefit from your investment for as long as you own the home.

7. Stability.
Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

To calculate whether renting or buying is the best financial option for you, use this calculator courtesy of Ginnie Mae: http://www.ginniemae.gov

 Reprinted from REALTOR^® Magazine Online
 by permission of the NATIONAL ASSOCIATION OF REALTORS^®
Copyright 2005. All rights reserved.
 www.REALTOR.org/realtormag