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Top 10 Reasons to Buy a Home

The Rent vs. Buy issue is an ongoing question for almost everyone - especially in the Bay Area, where property values have been climbing steadily upwards for years. Of course, the answer is different for every family; a combination of factors from finances to school systems to commute times to the rise and fall of the housing market and more makes it impossible to give a blanket answer. However, there are a few undeniable advantages to owning a home - read on to see the list (adapted from Business Insider), and see if it tips the scales for you!1. Tax Benefits: the government subsidizes a portion of your purchase by allowing you to deduct the interest on your mortgage (up to $1M) and your property taxes from your income tax.2. Price Appreciation: of course, we have seen some housing busts over the last decade as well as the housing booms, but the Price-Schiller index shows that the price of a home will increase by an average of 3.4% per year. These small increases have a big payout over the course of a 30-year mortgage!3. Inflation Hedge: despite the Federal Reserve's efforts to prevent inflation, it's bound to happen eventually. When it does happen, everything will become more expensive - especially homes. Many people invest in houses early as a way to stave off the inevitable home inflation.4. Better Credit: 35% of your FICO score comes from your debt payment history, so paying your mortgage on time every month (and paying off your total debt) will eventually raise your credit score, allowing you to get better financing rates on future purchases.5. Building Equity: your home equity is the part of your mortgage that you have already paid off, through down payments and monthly mortgage payments. The more equity you have, the more borrowing power you have.6. Borrowing Power: having home equity gives you the opportunity to take out a home equity loan or home equity credit that can help you finance home improvements, college tuitions, and other big-ticket items.7. Move-up Power: increased home equity also increases your profit margins when you're ready to sell your home, helping you upgrade to a new home. The National Association of Realtors reports that the median down payment for a first-time home buyer is a mere 3%, compared to 22% for repeat buyers.8. Financial Planning: a fixed-rate mortgage provides a pretty stable view into your home expenses, making it easier to budget. Knowing your fixed costs for each month will help you plan and save for the future!9. Savings Plan: Adding extra mortgage payments can save you enormous amounts of money in interest. For a $220,000 house with a 4% loan, adding even ONE extra mortgage payment per year would save you $24K in interest and allow you to pay off your mortgage 4 years early. Four extra payments a year (one per quarter) would save you $65K in interest and shorten your mortgage by 11 years. Check out this calculator from mybanktracker.com to estimate how much you could save on your mortgage with a few extra payments!10. Capital Gains: the Taxpayer's Relief Act of 1997 exempts homeowners from paying capital gains tax on the first $250,000 (or $500,000 if you're married), as long as you live in the home for 2 of the past 5 years. You can utilize this exemption every two years!For more details about how owning a home can offer some serious financial benefits, read the full article here at BusinessInsider.com. And if you decide that owning a home is the right choice for you, feel free to contact me! I would be happy to meet with you to discuss your options and to help you find the perfect home. You can reach me by email at laila@lailafields.com, call me at (408) 605-8741, or contact me through my website.

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