Many growing families want to expand into their own home, but might feel overwhelmed with the buying process. While renting does have its benefits, buying a home for your family will ultimately outweigh those advantages. The most common way first time homebuyers purchase a home is through a mortgage, as there are many benefits in doing so. Here are the top three benefits for home mortgages.
There Are Tax Benefits
As homeowners, you get to deduct your mortgage interest (up to $1 million) and property tax from your annual income. New homeowners get even more benefits, as much of the money paid toward your home goes toward your interest. This means higher tax reductions.
House’s Value Go Up Over Time
Houses generally have a price appreciation. From 1987 to 2009, the existing price of houses increased 3.4% annually. While the annual percentage may not seem like a lot, over decades, that will become a significant price adjustment. For example, if you bought a house at $200,000 today, in 30 years it would evaluate to over $540,000.
Builds Your Credit
Having a good credit score is one of the most important things when it comes to making big purchases. Most loans from financial institutions determine the amount and interest rate you get when taking out a loan for a large purchase. Since your home is broken down into mortgage payments, making such payments contributes to quite a large percentage of your FICO score (approximately 35%).