Moving Up & Moving Out
Are you a college graduate living with your parents still? You’re not alone. The share of college graduates moving back in with their parents jumped to 28% in 2016, compared to 19% in 2005. But it’s nothing to be ashamed about—moving back home can be a great opportunity to find a job and start saving up money for the future.
Whether you’re living at home with the parents or renting your own place, it might even seem nice at times to not have the responsibility of homeownership. But time and time again, statistics prove that owning a home is totally worth it.
Here are five reasons to put buying a home on your 5-year plan:
- Homeowners have a greater net worth than those who rent. According to the Federal Reserve’s Survey of Consumer Finances, the net worth of a homeowner is 44 times greater than a renter. This is perhaps the best benefit of purchasing a home. This is mostly because the equity that you have in your home grows as you pay your mortgage down. Equity is the amount that you can sell your home for, minus what you still owe on your mortgage. So, it’s almost like a forced savings account. It will give you and your family a sense of security and stability, knowing that you are building your wealth.
- Freedom and control over your living space. Paint the walls any color you please, install a doorbell camera, make renovations and put a fence up for your dog. (Did you know: 33% of millennial homebuyers say the decision to purchase a home was driven by their dog. Compare that to 25% who cited marriage as their primary reason to buy a home.) Plus, you don’t need to worry about rent increases or overbearing landlords, or having your rental sold from under you.
- It’s a smart investment- Real estate consistently appreciates in value, meaning that your home is acting as an investment. On average, home prices have risen from 3-6% over the last 20 years, according to data analytics company Black Knight. So, as long as home prices continue to rise, you can rest easy knowing that you’re putting your money into a safe investment.
- Tax deductions- You can deduct the interest paid on your mortgage from your taxable income. You must itemize your taxes to claim the deduction. First-time buyers can also deduct real estate property taxes paid on a first home and a vacation home from their income taxes.
- You can borrow money against the equity you have in your home. If you need money down the line to pay off debt, start a new business, or pay tuition, medical bills, renovation costs, etc., you can use the equity in your home to do so. Because the loan is secured by the property, interest rates for these types of loans are typically much lower than rates for personal, business or car loans.
The information contained herein (including but not limited to any description of lending programs and products, eligibility criteria, interest rates, fees and all other loan terms) is subject to change without notice. This is not a commitment to lend.
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