What Are the Advantages of a First-Time Home Owner?

There are many advantages to home ownership that first-time home buyers should be aware of. Not only is there a certain pride of ownership that comes with buying a first home, but there's also the ability to tend your own lawn and paint an accent wall the color of your choice. Additionally, there are several other perks that apartment dwellers are just not able to enjoy.

Build Equity

Many first-time home buyers are confused about exactly what "equity" is. Equity is the value of a home minus the total debts owed. The longer a home owner pays monthly mortgage payments, the more value the owner builds in the home for himself, making the net proceeds to him greater when it's time to sell. Renting never allows an occupant to build equity in a property; only home ownership offers that ability.

Homestead Exemption

Many states offer what is called a "homestead exemption" to first-time home buyers. This allows them to enjoy a credit towards their property taxes. The assessed value of the home is reduced so that the home owner does not pay the full amount. This is only allowable to home buyers who use the property as their primary residence, and rules can vary in different states.

Mortgage Interest Deduction

Many apartment dwellers have no knowledge about the mortgage interest deduction, a deduction that Uncle Sam allows to reduce a home owner's taxable income. According to Realtor.com, the mortgage interest deduction is itemized on IRS form Schedule A, Itemized Deductions, to lower a home owner's taxable income, which in turn can lower the taxes due. New home owners should consult with their personal accountant to see how much they might be able to save when tax time comes.

Mortgage Choices

First-time home buyers have several beneficial options for mortgages and down-payment assistance programs. FHA-insured loans provide less stringent qualifying rules than conventional loans, and a lower down-payment option for buyers who are just starting out. Additionally, there are many programs that offer down-payment assistance to first-time or low-income borrowers, either at the statewide or city level. Experienced local loan originators should be ready to assist first-time home buyers with several options.


Photo Credits

  • Brand X Pictures/Brand X Pictures/Getty Images

About the Author
