Many millennials are shying away from buying their first home for a number of reasons. For example, some may be timid to enter the market after the recent market crash at the end of the last decade. Others may enjoy the flexibility associated with renting and not being tied down to a particular location for a long period of time. While there may be legitimate reasons why you do not want to enter the real estate market, there are also numerous sound reasons why now may be the right time to buy a home.
Rising Interest Rates
You may have been hearing for several years now that interest rates are expected to rise, and yet the rates continue to be close to record lows. However, with the results of the presidential election in, there is now even greater speculation that the interest rates will rise in the near future. If you purchase a home now, you may be able to lock in a great, low interest rate for years to come. Keep in mind that your interest rate plays a direct role in the amount of your monthly mortgage payment as well as in the loan amount that you may qualify for.
When you rent a home, you are throwing away a significant amount of money in rent on a monthly basis. As a homeowner, however, a large portion of your monthly housing payment would be applied toward principal reduction on your home loan. This means that your monthly payments are helping you to build equity and therefore to also build wealth.
The Benefit of Tax Deductions
There are many benefits associated with home ownership, and one of the most significant financial benefits that will work in your favor is tax deductions. You can deduct mortgage interest and property taxes as a homeowner, and this can have a dramatic and beneficial impact on your annual income tax liability. If you want to reduce your tax liability each year, owning a home may be one of the best options to consider.
Few people will argue against the fact that there are benefits associated with renting a home. However, owning a home has significantly more financial benefits for you, and you can dramatically improve your financial status when you make the move to purchase a home. Consider speaking with both a real estate agent and a mortgage professional today to begin exploring the options.