Further, homeownership entitles you to certain federal tax deductions, such as claiming your property taxes and mortgage interest paid, offsetting your annual income tax burden. You can also claim any mortgage discount points on the loan; these points are equal to 1% of your mortgage and involve prepaid interest. They are tax deductible and can reduce your total mortgage payment. Renter disadvantage: If you rent your home, you might be able to claim the rent you paid for the year on your income tax, but the tax benefits end there. Renters aren’t eligible for housing-related federal tax credits or deductions. 5. Lower mortgage rates. Currently, in today’s market, interest rates have fallen and are on the lower side, making it easier to purchase and own your own home than it was years ago. Bear in mind that interest rates are variable and rise and fall, so as part of your home-search process and getting approved for a mortgage, keep an eye out for low rates and try to lock that in with a fixed rate. Renter disadvantage: With renting, landlords set the price, which often increase annually. You don’t have the option of locking in a fixed rate for the duration of your mortgage. In fact, in many states, average mortgage monthly payments can be lower than typical rent amounts. 6. Creative freedom. One major advantage to owning your home is that you have creative license to make almost any kinds of changes or improvements that you’d like, provided they don’t violate codes or bylaws. Change the colors of the walls with fresh paint, finish a basement, add a closet, expand your bathroom, build a deck, renovate your background — you have the freedom to make your home truly yours with homeownership.
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