A home’s value increases both emotionally and economically over time. As kids, many of us would have played the board game “Monopoly” and might have celebrated when we bought a new house in the game. Similarly, when the same thing happens in real life, there is always a feeling of euphoria. There are many financial and personal advantages, which one can gain by investing in their own house.
Real estate is always a solid long-term investment as these are always in steady demand which remains unaffected by volatile movements in the stock market. In the first few years, it may be cheaper to rent. But over the time, as the interest portion of your mortgage payment decreases, the interest that you pay will eventually be lower than the rent you would have been paying. But more importantly, when you own a home, you are not throwing away all that money on rent. You are, in fact, putting your money every month in something that is completely worth spending on.
When you buy your own house, you tend to get a feeling of achievement, which is incomparable and out of the world. There is a great sense of belonging to the surrounding community, in which your house is located. This might not be the same in case of a rental property since you can’t call it your own. Once you have bought a house, many other things fall into place, like the sense of security and peace of mind. Finally, you feel that you are well settled in life.
For many, the freedom to live as they wish is the major goal in their life. In your own home, you are no longer bound by the rules of your landlord. You can decorate your rooms as per your wish. Everything from the wallpaper to the furniture involved can be as per your choice. When it comes to renovation or altering the landscaping, you need not think twice about approvals and spending. Your home indeed becomes your castle.
If you are fond of having pets, then your own house is indeed a happy place to have them, since there will be no restrictions. Also, your own house will be a safer place for pets. You can even have furniture solely designed for your furry friend
With your own home, you are indeed getting a permanent address, which can be given for all the documentation purposes. If you have children, then you need not worry about changing schools at the discretion of your landlord’s decision. With gated community living on a rise, children can build strong & lifelong friendships with other kids of their age group. There is a greater chance of strong future planning with a fixed house, which is all yours.
If you have availed a home loan to purchase the house of your dreams, then you are entitled to claim both the interest as well as the principal amounts of your home loan repayments for tax benefits. If you are a first time home buyer in India, you can also get an additional deduction of Rs 50,000 on the interest for your home loan of up to Rs 35 lakhs.
In a welcome move by the Reserve Bank of India, the institution announced 25 basis points drop in repo rates from 6.75 to 6.50 percent in the first bi-monthly policy. There is a possibility of a further drop in the policy rates resulting in a renewed interest in the real estate sector. This decision is expected to bring some relief to the homebuyers as the drop in repo rates will, in turn, reduce the home loan interest rates. In order to encourage prospective homebuyers, most of the banks will have to extend the same benefit, enabling home buyers to book a dream house.
Equity is the difference between the amount at which you will be selling your home and the amount you still owe on it. Thus with every year, your equity will start growing. There are several ways in which your home equity is increased over time.
With each year, the rate per square feet is increasing with increasing demands for real estate investments.
With payments in each month, your mortgage balance will keep coming down, and your home equity rises. With larger sums of payments, your equity can grow faster. One such method is bi-weekly mortgage payments where you make 26 payments throughout the year, and this helps you to build your home equity soon. Another method is by shortening your mortgage term completely.
These can raise the value of your home. Neatly maintained homes are always valued higher.
Last but not the least, the biggest benefit you get from buying your own house is the sense of pride and respect from your family and friends. This feeling is indeed the greatest asset in life.