In the competitive housing market, it can be easy to get caught up in the process of finding a home. As potential buyers hunt through neighbourhoods and suburbs, their attitude towards buying a house sometimes changes.
What once seemed like a fun adventure and an important step in adulthood can begin to feel like a burden.
This is even truer once the property valuation is completed and you discover the appraisal value of your future home. Finding a lender is the next step in the process, and this too can be a tricky decision. Differences between various loan packages and lenders can make a huge difference in your financial comfort.
As you are wrapped up in the hunt, keep in mind the benefits of buying your first property. Not only will you finally have a place to call your own, but there are also many financial reasons to invest.
Home Sweet Home: Your Most Important Asset
Holding property over the long-term brings many financial benefits. When you borrow money to buy or build a home, the government steps in to help you pay the loan. This is helpful in purchasing your first home and can ease your regular financial obligations in the short-term.
As time goes on, you should keep your home well-maintained. A home that has been cleaned and renovated as needed will increase in property value with the years. This means that the initial property price that you paid for the home originally could theoretically double by the time you pay off your loan.
At that point, you can decide to sell the house for a higher value than you originally paid to make cash. Alternatively, you can move out of the house and begin to rent it out. The rent money paid by tenants can become a stable and regular source of income.
Your equity is the amount of money for which you can sell your home, minus the portion you owe. It can also be described as the part of the home that you fully own. As you pay mortgages each month, that overall portion is reduced. In other words, your equity increases each time you make a payment.
Many mortgages increase slightly every month. The first payment will be lowest, while the final payment will be the highest. This ensures that you have the money to pay your mortgage comfortably every month. It also helps build your equity, increasing the net value of your home.
Financially Savvy Reasons to Own a Home
If this is your first time owning a home, it is important to understand the financial benefits. In addition to equity and wealth creation over time, there are a few other financial aspects that homeowners should look into:
- Mortgage tax deduction benefits
- Tax deductions on home equity loans
- Capital gains exclusions
- Mortgage encourages monthly savings
- Cheaper than renting in the long-term
Tax deductions and exclusions can help you financially in the short-term. Individuals who are considering home ownership should also learn how they can increase their benefits to get the most reward from their homes.
Mortgages can last from 15 to 40 years, so you may not see all the benefits of your home right away. As the years pass by, homeowners gradually build equity and wealth.
At FHOC, we believe in proper financial planning to help you reap the rewards of your new asset. Contact one of our agents today to explore your financial options and delve deeper into the benefits of first time home ownership. Our team is here to provide assistance and answer your questions.
First Home Owners Centre Contact Information
24/7 Sales Enquiry Line: (08) 6144 1088