REAL TipS: BUYING

Determine the financial benefits

If you are still wondering if buying a home is right for you, you should consider sitting down with your Texas REALTOR® and weighing the benefits of homeownership. And there are plenty. Owning your home provides stability and opportunities for financial security and personal wealth. While stocks may fluctuate dramatically, real estate typically is not as volatile. In addition to home-price appreciation, other financial benefits associated with homeownership include mortgage interest deduction and capital gain exclusion.

The interest – typically the largest portion of your mortgage payment for the first 10 years or so – is 100% tax deductible, if you itemize your taxes. And as long as you have lived in your home for two of the past five years, you can exclude up to $250,000 for an individual or $500,000 for a married couple of profit from capital gains on the sale of your home. The law states that you don’t even have to buy a replacement home. And you can use this capital gain exclusion every two years.

And finally, the more you pay on your home, the more you build in equity. That equity may be used in the future for a reverse mortgage or perhaps another type of equity loan. The more you know about the benefits of owning your own home, the less scary the process will seem. Just ask your Texas REALTOR®.

Texas Association of Realtors®