Pride of Ownership

Pride of ownership is one of the main reasons why people decide to purchase a home. This means that you can paint your walls the colors you choose, turn up the stereo, decorate the home according to your own tastes, and attach permanent fixtures to your home. When you buy your home, it gives you a sense of security and stability and is a great investment in your future.

Appreciation

Although the real estate market moves up and down, over the years, real estate has consistently appreciated. The Office of Federal Housing Enterprise Oversight records the movements of home values across the country and evaluates the changes by metropolitan area and region. Since the housing market consistently goes up, over time, a lot of homebuyers look to their home to protect them agains inflation.

Mortgage Interest Deductions

Owning your home is a great tax shelter and our government tax laws play favorites to homeowners. The full amount of mortgage interest is deductible on your taxes, and interest is typically the largest part of your mortgage payment each month.

Property Tax Deductions

Real estate taxes paid for your first home and vacation homes are fully deductible from your income taxes. Texas has a long history of protecting homeowners, and the property tax deductions for homeowners. The National Association of Realtors and the Texas Association of Realtors has always lobbied for homeowners' tax deductions – and they will continue to do so.

Capital Gain Exclusion

If you have lived in your home for at least 2 of the last 5 years, you can earn $250k for an single person and $500k for a married couple on the sale of your home, and you don't have to pay any capital gains tax! You don't even have to buy another new home. There is no limitation on age. You can earn income from the sale of your home ever 2 years - this means you could sell your home and profit every two years, put the earnings in your pocket, and pay the government nothing!

Preferential Tax Treatment

If you sell your home and profit more than the exclusion allows, that profit will be a capital asset if you owned your home for over one year. Capital assets always get preferential treatment by taxes.

Morgage Reduction Builds Equity

Every month, your payment goes towards the principal balance of the loan, which means you owe the bank less money for your home. Amortization makes the principal amount of the payment increase each month, while the interest portion decreases – and your total monthly payment remains the same. You will build equity on your home by paying down the principal balance each month!

Equity Loans

If you carry a credit card balance, you can't deduct the interest that you pay on those balances – which can charge you as much as 17-23%! Home equity loan interest is usually much less, and you can deduct it on your taxes. For most homeowners, it makes a lot of sense to pay off your high interest credit card balances with a home equity line of credit (HELOC.) You can borrow against your home's equity for a number of reasons, including college, a new business venture, college, or home improvement. In Texas , you can't borrow against more than 80% of your home's value.