The Advantages of Home Ownership John Doe Higher Learning University Prof. Jones, Economics 101

Appreciation, Equity and Pride  Appreciation: Homes accrue in value over time  Equity: As the mortgage is paid off, an owner builds equity which can be borrowed against in the future  Pride: The pride and security of ownership is the main reason that people buy homes

Tax Advantages  Tax Reports: Interest on mortgages can be deducted on tax reports  Income Tax: Property taxes paid on real estate that is considered a first home or a vacation home are fully deductible  Capital Gains Tax: If you have lived in your home two to five years and it has accrued in value, either 250K for an individual or 500K for a couple can be excluded from capital gains.

Credit, Stability and Other Issues  Establishes Credit: When you buy a home and make your payments on time, it can help you establish strong credit.  Stable Housing Costs: While the prices of rent can inflate, the payments with a fixed APR mortgage stay the same. This makes saving and budgeting easier.  Other Taxes: If your capital gains profits exceed the previously discussed limits, this is a capital asset and is treated preferentially by the IRS.

Works Cited  Weintraub, Elizabeth “Look at Eight Reasons to Buy a Home.” About.com. Retrieved April 19, 2008 from: /bb/buyhome.htm. /bb/buyhome.htm  “First Time Home Buyer: The Advantages of Home Ownership.” Home Loan Center. Retrieved April 19, 2008 from: e/FirstTimeHomeowners.aspx. e/FirstTimeHomeowners.aspx  “Should I Rent or Buy? “ n.d. Retrieved April 19, 2008 from: