The Smart Decision of Homeownership | Military Home Loans

The Smart Decision of Homeownership

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Why Homeownership Can Be a Smart Decision

It all comes back to the phrase “home is where the heart is.”

Owning a home is ingrained in the American spirit. It provides a sense of stability in that there is a place to call home that will always serve as a spot to unwind and to be with the ones you love.There is another aspect in play when it comes to why being a homeowner is a smart decision. Owning a home is a good financial decision that very often pays off over the long run.

Here are just a few reasons why homeownership can be a smart decision.

Buying Can Be Cheaper Than Renting

The basic principle is that you are paying down a loan for an asset you own rather than regularly making payments toward an asset that someone else owns. The rate of return there speaks for itself. When you look at what you would be spending for both options over the life of a loan, owning can be up to 35 percent cheaper than renting in some areas, according to a Trulia study.  


An extra 35 percent savings of the cash spent on the place you call home sounds like a good deal to us!

Homes Can Build Equity and Become an Asset

Home equity is defined as what the value of a home is minus what the homeowner's balance is on the loan. If your home's market value is sitting at $325,000 and you owe $225,000 on that home, you may have thousands of dollars in equity. Banks will lend money from that equity to a homeowner, which is called a home equity loan. You can use this money to do upgrades on the home, pay off debt, college tuition, or make other large purchases.

Home Prices are Continuing to Appreciate

According to the latest quarterly report by the National Association of Realtors, metro home prices accelerated in the fourth quarter of 2015. Specifically, the median existing single-family home price increased in 81 percent of the markets that were measured and 145 out of 179 metropolitan statistical areas “showed gains based on closings in the fourth quarter compared with the fourth quarter of 2014.” For all of 2015, 89 percent of measured metro areas had an increase in home prices, which is an increase from the averages in 2014 (83 percent) and 2013 (88 percent), according to the report.


Interest Rates are Still Considered Low

In March 2016, it was reported by ABC News that the average rate for a 30-year mortgage was 3.68, which is around the same rate as in January 2015. By comparison, the average rate 10 years ago was 6.32 and 20 years ago it was 7.62, according to Freddie Mac.

Rates can fluctuate like anything else, but right now they are low. Typically, homebuyers have a 30-60 day window to lock in an interest rate. Locking it in earlier allows them to avoid it going up during their lock period.

Tax Advantages

The interest on a mortgage can be tax deductible if you itemize your taxes and it may be surprising how much can sometimes be saved. Homeowners can deduct their mortgage interest, pieces of their initial closing costs and property taxes.

The benefits of homeownership are twofold – you can provide yourself and family with a consistent source of stability from a mental standpoint as well we from a financial standpoint. In the end, deciding to be a homeowner is a smart decision.



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Information accurate as of publication date; the views, articles, postings and other information listed in this section are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation. The material in this section is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.