Kevin Martini recorded the 46th episode of the Martini Mortgage Podcast on the five financial reasons to buy a home. Yes, a benefits of homeownership is the pride of ownership and when you own a home you can decide if you want a puppy, you decide what color you want to paint the walls however pride of ownership is not a finical benefit. however that is not a financial benefit. Below you will find the audio and the video edition of the the Martini Mortgage Podcast that is hosted by Senior Mortgage Strategist Kevin Martini.
Leverage Can Increase Real Estate Net Worth
What is leverage? In the simplest form, leverage is where you borrow money to increase your potential return on an investment. Homeownership is an investment you can leverage against in the future that not only provides shelter and safety but also helps you build your family’s wealth.
“Real Estate is one of the easiest assets to leverage”Kevin Martini
A mortgage allows you to leverage the financing of a home. Right now home loan rates are epic, you do not need to make a 20% down payment to buy a home and in fact today, with the Martini Mortgage Group at Benchmark Mortgage, there are community lending programs available with low and no down payment required….oh by the way, the credit does not need to be perfect and the mortgage is amortized routinely over 30-years.
Your Housing Cost Can Increase Your Wealth
Some people are afraid to take on the obligation of a mortgage because they are afraid of making a mortgage payment. If you are paying for housing whether you own or rent. Here is a fact, when you rent you are paying for a mortgage, you are just paying your landlord’s mortgage for them and you are helping with the wealth creation of the landlord.
A Mortgage Is A Form Of Forced Savings
Every month when you write the check for your mortgage you are not only paying interest, you are also paying principal. When you pay principal you are reducing the amount you owe. The amount you pay towards principal is your forced savings.
Mortgage loans are amortized and the way amortization works is like so: the principal portion of your principal and interest payment you make increases slightly every month. It is lowest on your first payment and highest on your last payment. Forced mortgage reduction (a.k.a. forced savings) builds equity.
In addition, there may be appreciation. Appreciation is the rising of home prices of time. Forced savings and appreciation is how the majority of wealth is created real estate.
There May Be Tax Benefits When You Own A Home And Have A Mortgage
There may be substantial tax benefits to owning a home and having a mortgage. In addition to the mortgage interest there may be the ability to write off the SALT (State And Local Taxes).
When you rent there is no tax benefit nor ability to write off your rent on your Federal or State taxes however do not fret, your landlord most likely will get the benefits and I am sure your landlord is thankful you are participating to their forced savings.
Homeownership Is A Hedge Against Inflation
Inflation is defined as a general increase in prices and a fall in purchasing value of money. Owning a home is typically a hedge against inflation. As a primer, housing costs and rents have tended over most periods of time to go up higher than the rate of inflation and for this reason owning a home is an attractive proposition because it provides a hedge against inflation.
Should You Buy A Home?
I do know! There are many benefits to homeownership but I do not know your unique situation. I do know that one should work with an experienced local trusted mortgage strategist because the first step is loan and the second step is home.
Everyday I help homebuyers enter the market. Some are first-timers and some are seasons pro’s purchasing their third or fifth home and are moving up or down. If you want to have a confidential conversation in a stress-free environment that its judgement free and want some trusted advice, reach out to the Martini Mortgage Group at Benchmark Mortgage