Purchasing a Home: 7 Reasons to Consider Home Ownership
Like so many other Americans, African Americans continue to rent because they don't want the responsibility that comes with home ownership. But buying a home has several built-in financial and social advantages worth considering:
- Tax benefits. Mortgage interest and property taxes are generally deductible, so owning a home can potentially save you thousands of dollars a year in federal and state income taxes. State tax benefits vary.
- Equity that grows and grows. Instead of watching a pile of canceled rent checks grow, you'll watch your equity grow. With each monthly mortgage payment, you'll own more and more of your home. When you finish paying off the mortgage, every dollar your home is worth is yours (unless you have an outstanding home equity loan).
- Financial appreciation. Historically, real estate values increase over time. The longer you stay in your home, the likelier you'll be to make a significant profit when you sell it.
- Less expensive borrowing. If you ever need to, you can borrow against the equity in your home to make improvements, pay for an unexpected emergency, or consolidate credit card debt—at interest rates that are lower than other types of loans.
- Personal privacy. Renters always have to deal with the fact that a landlord can enter their home for a variety of reasons, often without asking permission.
- Freedom to renovate. Ownership gives you property rights that enable you to make your home your own. You have the freedom to redo your kitchen, build a deck, put in a swimming pool, or add a playroom for the kids.
- Community life. When you own a home, your neighborhood becomes an important part of your life. There's a greater incentive to get involved in things like local government, your children's school, or the youth soccer league. In addition, you'll meet people who share common interests.
The next time you write that rent check, think about all of the positives that come with home ownership. You may find yourself closing on that mortgage before you know it.
The Prudential Insurance Company of America, Newark, NJ