Most first-time home buyers already have the advice of friends and family who are more than likely encourage them to buy new homes in Beaumont CA. However, you might still be wondering if buying a home is right for you. It is important to know a lot about the home buying process, this way the entire process is less scary to you. So here are eight great reasons on why you should purchase a home.
Pride of Ownership
The number one reason why people want to own their own home is simply the pride of owning it. You are not tied down to the shackles of an apartment or a rental home where you aren’t able to paint anything the color you want. Homeownership allows your family to have stability and security all while making an investment in your future.
Real estate tends to move in cycles, either up or down, but it has consistently appreciated which means that the value has consistently gone up over the years. A lot of people view owning new homes in Beaumont CA as a safeguard against inflation.
Tax rates favor homeowners, so owning a home makes for a great tax shelter. Mortgages can seem like a lot to deal with, but as long as your balance is less than the price of your home, then it is fully deductible on your taxes. The largest component of your mortgage payment is the interest.
First homes and vacation homes are considered real estate property taxes, and they are fully deductible for income tax purposes. The passage of Proposition 13 in 1978 established the amount of assessed value after property changes hands and limited property tax increases to 2% each year or the rate of inflation, whichever amount is less.
Excluded Capital Gain
As long as you have lived in your home for at least two out of the past five years, then you are able to exclude up to $250,000 for an individual or $500,000 for a married couple of profit from capital gains. There is no age restriction for this, and you also do not have to have purchased a replacement home. You are able to exclude that threshold above every 24 months free from taxation.
Preferential Tax Treatment
Should you decide to sell your home, upon the sale if you receive more profit than the allowable exclusion then that profit will be considered a capital asset if the home has been owned for more than a year. Capital assets also receive preferential tax treatment, which means that if the profit exceeds the exclusion then the taxable part will be less than you originally thought it would be.
Build Equity through Mortgage Reduction
Part of each payment you make every month is applied to the principal balance of your loan, which will reduce your obligation. This is also known as amortization. The way this works is that the principal portion of your principal and interest payments will increase slightly every month. Your first payment on new homes in Beaumont CA will be the lowest, and the last payment will be the highest. Each $100,000 mortgage will, on average, reduce by about $500 in principal within the first year.
Equity loan interest is often much less than credit card balance interest and it is deductible. So for many homeowners, it makes a lot of sense to be able to pay off their credit card debt with a home equity loan. Consumers are able to borrow money against their home’s equity for a wide variety of reasons.