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The Benefits of Owning Your Own Home

Income Tax Savings
You can deduct all of the interest on home loan and property taxes you pay in a given year from your gross income to reduce your taxable income.

Stable Monthly Housing Costs
When you rent a place to live, you can certainly expect your rent to increase each year. If you get a fixed rate mortgage when you buy a home, you have the same monthly payment amount as long as you have the loan. Even if you get an adjustable rate mortgage, your payment will stay within a certain range for the entire life of the mortgage.

San Diego housing is expensive but imaging how much San Diego rent might be in ten, fifteen, or even thirty years from now? Which makes more sense?

Forced Savings
Mortgage payments help build your net worth. Unlike rent payments, a portion of the money you pay goes toward building equity (difference between the market value of a house and the amount still owed on the mortgage). As you pay off the mortgage, you owe less on the home and "own" a larger share of it .Find out how much you are paying for rent!

Another advantage is real estate generally appreciate about five percent a year.

Additional tax benefits
The tax code is generous to homeowners. Not only can you deduct the interest on your home mortgage, but you can avoid taxes on the profit from selling your home if you buy another home of equal or greater value within two years of the sale. Also, IRS rules allow you to avoid taxes on up to $250,000 (or $500,000 if you are married and filing jointly) of profit from the sale of your home.

The Best Investment
Generally, homes appreciate about five percent a year. Some years will be more and some year will be less, the figure will vary from neighborhood to neighborhood, and region to region. A buyer can purchase a home with a cash down payment that is only a small fraction - as little as 10 percent or less - of the total purchase price, but the return is based on the total value of the property. This is called leveraging an investment, and it makes the rate of return on a home much greater than on an equivalent investment where the buyer must put up the entire purchase price.

Here's how it works. If a buyer makes a down payment of $10,000 on a $100,000 home and the home's value increases to $105,000 during the first year of ownership, then the homeowner's equity (the value of the home minus any mortgage debt) has increased from $10,000 to $15,000. That is a 50 percent increase on your investment in just one year.

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