1. It means you have the opportunity for an asset to appreciate
Appreciation is never guaranteed but by owning your primary residence you have the opportunity to capture appreciation. The amount of land on this earth is finite, meaning it is limited and no more can be created.
2. Lock in your costs with a fixed mortgage.
When you purchase a home with a fixed rate mortgage you are locked into fixed monthly payments. That only adjust for insurance and tax adjustments yearly. You do not have a landlord or apartment manager raising your rent every year.
3. Mortgage tax deduction benefits
- Mortgage deduction: The tax code allows homeowners to deduct the mortgage interest from their tax obligations. For many people this is a huge deduction, since interest payments can be the largest component of your mortgage payment in the early years of owning a home.
- Some closing cost deductions: The first year you buy your home, you are able to claim the points(Interest paid upfront to buy down your overall interest rate) and origination fees on your loan, no matter if they are paid by you or the seller. And because origination fees of 1 percent or more are common, the savings are considerable.
- Property tax is deductible: Real estate property taxes paid on your primary residence and a vacation home are fully deductible for income tax purposes.
- In addition to your mortgage interest, you can deduct the interest you pay on a home equity loan (or line of credit). This allows you to shift your higher rate debts to a home equity loan, pay a lower interest rate than the horrendously exorbitant credit card interest rates, and get a deduction on the interest as well.
4. Capital Gains Exclusion
Under current tax code if you buy a home and live in it as your primary residence for more than two years(2 out of 5 years https://www.irs.gov/taxtopics/tc701.html) 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.