Financial Freedom....not just a dream.
As we clean up the paper and ash from this year's 4th of July celebrations, we remember the fact that we are free here. These freedoms have come at a great cost and we are forever grateful to the men and women who have sacrificed so much to maintain this freedom. As I ponder the word, FREEDOM, it makes think about how much we long for financial freedom and how sometimes it just seems unattainable. Our world is fraught with excess, and unhealthy debt is often the result of that excess. We overspend and undermake, it seems. So with all of this in mind, can we shine the light on financial freedom? Can we talk about how owning our home helps provide this financial freedom? How? Well let's just look at a few ways...
1. Homeownership Builds Wealth Over Time
When you purchase a home you can afford, it allows you to gain equity while paying down the interest on this long term investment. Can you imagine paying off your home so that you can rest at ease in your retirement years? That is financial freedom!
2. You Build Equity Every Month
Once you've built up equity, you can use this to either improve your home, which will further add to the value, or you can wrap high interest debt such as credit cards and auto loans into an equity line of credit with much lower interest rate... and get unwanted debt paid off much faster!
3. You Reap Mortgage Tax Deduction Benefits
Who doesn't need a tax break? Mortgage interest is deductible, some of your closing costs are tax deductible and property tax is deductible. Those are 3 great reasons right there to buy a home. You can't write off rent....but your landlord gets to...why give him all the tax benefits?
4. Tax Deductions on Home Equity Lines
So you can write this off too?? Why wouldn't you want to do this! In addition to your mortgage interest, you can deduct the interest you pay on a home equity loan (or line of credit). Again, as mentioned above, this allows you to shift your credit card debts to your home equity loan, pay a lower interest rate than the high credit card interest rates, and get a deduction on the interest as well!
5. You Get a Capital Gains Exclusion
If you buy a home to live in as your primary residence for more than two years then you will qualify. When you sell, you can keep profits up to $250,000 if you are single, or $500,000 if you are married, and not owe any capital gains taxes. Cha-Ching!
6. A Mortgage Is Like a Forced Savings Plan
Paying that mortgage every month and reducing the amount of your principal is like a forced savings plan. Each month you are building up more valuable equity in your home. In a sense, you are being forced to save—not so when renting...you are just throwing money away when you are paying off someone else's mortgage. Ouch.
7. Long Term, Buying Is Cheaper than Renting
Over time, as the interest portion of your mortgage payment decreases, the interest that you pay will eventually be lower than the rent you would have been paying. But again, more importantly, you are not throwing away all that money on rent.
I am here for support, advice, and guidance. Call me today to learn about how I can help you start this journey!
