There are certainly more than 5 benefits to owning a Gulf Shores home. Yet some first-time buyers are skeptical of buying a home with the uncertainty surrounding the housing market.
The uncertainty many refer to when talking about the housing market involves the magic date when home values will start to increase again. Since no one knows when this may occur, the word uncertainty (when paired with the housing market) often reveals a negative connotation.
These are just 5 of the many reasons for buying a home this year:
Appreciation – Buying a home now (at current interest rates) can almost ensure your home’s appreciation in the future. Mortgage rates have never been lower and home prices in many parts of the country are down. This is the perfect recipe for home appreciation. In addition, many foreclosed homes are available for a fraction of the original cost. This can translate to a higher profit if you decide to sell once the market rebounds.
Property Tax Deductions – Real estate property taxes for a primary home and vacation home are fully tax deductible. The IRS provides detailed tax information for first-time buyers that may answer many questions about what deductions homeowners are eligible for.
Preferential Tax Treatment – If you own your home for more than a year and receive more profit than the allowable exclusion after the sale of your home, the profit will be considered a capital asset. Capital assets are given preferential tax treatment.
Building Equity – Many factors such as credit qualification, loan flexibility, and annual percentage rate (APR) contribute to the final decision of what type of mortgage loan best fits your goals. Yet, a new trend being used by some homeowners is to actually add money to their monthly payment to decrease the principal balance of their loans at a much faster pace. This trend is called equity building. Equity builders usually select a home loan with a lower interest rate (and a shorter term loan such as a 15-year fixed) to help build equity faster. This rapid payment process allows borrowers to:
- Pay off the principal balance faster
- Lock in near-record-low interest rates
- Shorten the length of their home loan
- Own their home faster
- Pay substantially less mortgage interest
Home equity is the largest single source of household wealth for most Americans.
Pride – Homeownership offers many benefits to many different types of people. For some homeowners, playing their music as loud as they want and painting the walls the color of their choice is a perk. For others, homeownership will permit them to build an NBA regulation size basketball court on their own property. For others, home ownership may allow them to build the indoor swimming pool of their dreams. No matter who you are, homeownership is a purchase, commitment, and journey that’s sure to bring you pride.
When the uncertainty surrounding the Gulf Shores housing market fades and the market rebounds, homeownership may in fact transform that pride of ownership into profit through selling your little corner of the world.