topic4

Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage,
property taxes you pay, and some of the costs involved in buying your home.

Gains. Between 1998 and 2002, national home prices increased at an average of 5.4 percent
annually. And while there’s no guarantee of appreciation, a 2001 study by the NATIONAL
ASSOCIATION OF REALTORS found that a typical homeowner has approximately $50,000
of unrealized gain in a home.

Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let
you build equity ownership interest in your home.

Savings. Building equity in your home is a ready-made savings plan. And when you sell, you
can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any
federal income tax.

Predictability. Unlike rent, your mortgage payments don’t go up over the years so your
housing costs may actually decline as you own the home longer. However, keep in mind that
property taxes and insurance costs will rise.

Freedom. The home is yours. You can decorate any way you want and be able to benefit from
your investment for as long as you own the home.

Stability. Remaining in one neighborhood for several years gives you a chance to participate
in community activities, lets you and your family establish lasting friendships, and offers
your children the benefit of educational continuity.

To calculate whether renting or buying is the best financial option for you, use this calculator
courtesy of Ginnie Mae.