Guest Author - Katie Murphy

In the United States, if you don’t own your home, you are in the minority. The homeownership rate is currently about 67%.

Homeownership can be a major financial asset. Renters pay monthly expenses for the landlord and that money is never seen again. When you own a home, your monthly payment creates added benefit in terms of your federal income taxes, and perhaps your states taxes too. You can deduct the interest on your mortgage (which is the substantial portion of the payment for the first many years) and you can deduct the property taxes you paid. Renting may free you up from maintenance and repairs, but you don’t build equity and you have no protection against rent increases.

One thing to consider is how long you plan to stay in the home. There are upfront costs to purchasing a home and if you plan to stay in the home at least three years, the benefits of homeownership should outweigh the short-term benefits of renting.

Historically, home prices rise year-over-year. The National Association of Realtors estimate the average increase is near 6%. This is not to say prices never decline. As a matter of fact, this past year prices have declined slightly, but that was only after several years of double-digit increases. The market had to level out for a while or no one would be able to afford a home. Buying a home, and taking care of it, is one of the best ways to invest in your future.

Homeownership doesn’t only make sense financially, it is also important to remember a home is the place where you live, raise your family and, sometimes, make lifelong friendships.

If you feel homeownership is a positive move for you determine if you are ready to buy a home. Here are some questions you should consider:

1. Do you have a steady source of income, which can be documented or verified?
2. Do you pay your bills on time?
3. Do you have money saved for a down payment?
4. Do you have the ability to pay the mortgage plus related housing expenses?

History proves homeownership offers many benefits. Owning a home gives you freedom, stability and security. You are in control. Only you can permit someone to enter your home. You can have a pet without paying the landlord a deposit or asking permission. You can paint the walls red, white and blue if you wish.

Remember, there are homes in all price ranges and, when you are ready to become a homeowner, make sure you buy a home in the price range comfortable for you. Generally, a good estimator is that housing costs are about 1/3 of your income.