The Benefits of Owning a Home

Owning a home has often been called the real American dream. It has long been considered a sign of financial prosperity, and this reputation is routed in reality. Being a property owner brings a great deal of benefits varying from those concerning personal tastes, priorities and considerations to simple, sound financial planning.

Modifying the Property

For many people, one of the greatest benefits of owning a home is the ability to call it your own. While renting a property, you do not often have the ability to make modifications. In some rentals, this limits your ability to update carpeting or cabinets. In other rentals, even painting walls is prohibited. Once you own a property, you have complete authority to change it as you see fit. This can mean adding an addition, changing the layout of the kitchen or simply planting new landscaping. Any time you make this change, you will know it is a permanent change to your property in order to make it your own. You will not have to return the home to its original state in the future as you would with a rental. 

Building Equity

The most direct financial benefit of home ownership is equity. When you are renting, your check each month buys you only 30 days of residence in a temporary property. This check goes straight into the pocket of the landlord. When you own a home, you will still be cutting a monthly check. However, this check goes to your mortgage lender to ultimately reduce the principal debt on your home. You gain equity in the home with each check you write. If you sell the home for a sum greater than you purchased it for, the sum of your mortgage checks will come right back to you in the form of a profit. 

Establishing Credit

With greater equity comes higher credit. If you make regular mortgage payments on time, your credit score will reach levels you previously were unable to attain. To a lender, home ownership is the greatest sign of financial responsibility. This means you can get new loans for things like college tuition for your children or home equity loans to improve your property. While it is ill-advised to take out too much debt against your property, smart borrowers can use the leverage of home ownership to ultimately increase their wealth and financial independence. For example, taking a home equity loan to improve a home and increase the ultimate value of the property can be well worth the expense.

Other Reduced Costs

Loans are not the only thing more affordable for home owners. Insurance costs and other expenses may also decrease with home ownership. Homeowner's insurance is expensive. However, homeowners can receive discounts on car insurance, travel insurance and other costs. Because homeowners are generally viewed as more responsible individuals, many companies are willing to extend discounts in order to deal with homeowners. Even though homeownership is not cheap, these discounts can often partly make up for the cost.