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When you buy your house and pay your monthly mortgage, you can gradually accumulate what lenders call equity. Equity is an ownership interest in the property that you can convert into cash by borrowing against it or by selling your house. As a renter, you lose the opportunity to build equity. As a homeowner, paying your mortgage can help you attain financial freedom.
Stable Housing Costs
Another advantage to home ownership is that mortgage payments can remain unchanged throughout the life of your mortgage. Renters may face an increase in rent payments year after year. With a fixed rate mortgage, over time your monthly payments remain the same as other costs of living can increase due to inflation. As a homeowner, you have the advantage of knowing what your housing costs will be far into the future.
As a homeowner, you will enjoy significant tax breaks that are not available to renters. The most important tax benefit of home ownership is that interest paid on your home mortgage is usually deductible. This fact alone can save you a substantial amount each year in federal income taxes.
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