Neil Blumberg, real estate broker, 502-439-2826 www.GoldenRuleMetro.com

FINANCIAL BENEFITS OF HOME OWNERSHIP

1   Property Taxes and Interest Deduction: Under the current tax code, most homeowners can deduct property taxes and interest paid on their mortgages each year they own their properties. They are allowed to write off interest on both their first and second mortgages (and even equity lines and loans where their homes are used as the collatreral).

2   Borrowing Against Equity: Each month homeowners make their mortgage payments, they pay down part of their debt.  The difference between what a homeowner owes on the property and the value of the property is called equity.  After a homeowner has built up equity in his house, he can borrow against it.  Many people use the equity as a retirement savings, or to improve the property, buy a car or perhaps pay for their childrens education.  Seniors are using equity for reverse mortgages, which allows them to sell the house to the bank, remain in possession until death, and receive from the bank a monthly payment! 

3   Home Appreciation:  Another way equity is built up in a house is by passage of time, because, unlike cars and almost any other item, property tends to increase in value each year. 

4  Fixed Monthly Payment:  Whereas renters rent steadily increases over the years with inflation (or investor greed), those homeowners who have fixed rate mortgages will never have to pay any increase in their monthly mortgage payment.  Over a 30 year period this can amount to tens of thousands of dollars in savings.

5  Car Insurance:  Many insurance companies will give the homeowner a discount (up to 10%) if he insures both his car and home with them.

6  Recent Federal Government Changes: According to an article recently published in RISMedia, "during the last few years, the federal government has made owning a home even more financially favorable. Recent improvements enacted include the following: 

* In 2005, the 15 percent tax bracket for married couples will increase from $46,700 to $55,900, so that many families currently in the 27 percent (tax) bracket will drop back a level allowing for more tax savings.

* The federal government has recently relaxed rules on IRA and 401(k) retirement accounts, permitting first-time homebuyers to tap into their retirement funds for their down payment without paying penalties on early withdrawal.

* The federal government now offers exclusions of capital gains on sales of principal residences, which has resulted in $22.9 billion in tax benefits over the last several years. This category has ballooned since 1997, when Congress first sanctioned tax-free treatment of up to $250,000 (for single filers) or $500,000 (for married joint filers) on home-sale profits. The exclusions are available on homes owned for just 24 months, and can be used without limit every 24 months."

PSYCHOLOGICAL BENEFITS OF HOME OWNERSHIP

1  Stability:  Perhaps one of the most underrated and least discussed advantages of home ownership is the stability it brings to the homeowner and, if married, to the family.  Same schools, same neighbors, same shops. Homeownership fosters lifelong friendships and fond memories of "where I grew up".  Home ownership has come to be recognised as one of the main elements in achieving the American Dream.

2  Avoid Proximity Problems caused by Apartment-Dwelling: Many people who have lived in an apartment will rember the neighbors cooking smells and the noises.  Homeownership usually eliminates these problems.

3  Freedom From Restrictions: Renters can usually not paint the walls the way they want, and even if they could, would not want to spend the money on it.  If the landlord allows a pet, there will often be a surcharge.  Home ownership gives you total control of your home environment.