Why own a home?

Homeownership has always been a part of the great American dream. Additionally, it is the path to personal and financial stability and ultimately financial independence.  Why has home ownership been part of the American dream?  Why own your own home when you can rent?  Just what is the value of homeownership?  Certainly, there are tangible benefits, such as tax deductions and investment appreciation.  However, before exploring these, I would like to discuss some of the intangibles, which are just as important (or maybe more so), of owning your own home.

Intangible 

In an article on the intangible benefits of homeownership in The Texas Realtor, March/April 2000, John Eckstrum says “Having a place to call your own is both comforting and empowering.”  He talks about the importance of developing friendships with your neighbors and feeling you have a place in the community. Further, he states, “I’m talking about the security a child feels knowing that the front door she walks through today will be the same front door next month, next year…” Research indicates it gives the homeowner a higher sense of self-satisfaction and gives children a sense of security.

Tangible 

From a practical standpoint homeownership makes sense in a very fundamental way.  Gary Tucker of Acceptance Mortgage Corp in San Marcos (www.educatorloan.com) offer the following example of the financial advantage of homeownership.  They make the statement that “If you are paying $900 per month in rent, you could be living in (buying) a $120,000 home.”  This estimate is based upon some assumptions such as your being in a 28% income tax bracket and buying a home in an area where the taxes are moderate.  The reason you can do this is because you are able to take a tax deduction (income tax) of over $140 per month.  And, while there are no guarantees, in most years homes appreciate in value on an average of 4%, so that next year your $120,000 home will be worth $124,800.  At that rate your home will be valued at over $140,300 in 5 years.

How to Get Started

How do you own your own home?  Maybe you would like to own a home but just can’t seem to come up with the down payment.  Or maybe you’ve heard of “closing costs” and are not sure how much that could be.  Or maybe you are just not sure of how to proceed and have been a little too intimidated to ask, or didn’t know whom to ask. The road to homeownership can be confusing.  Even for teachers.  I know, because before retiring, I spent my entire professional life as an educator (teacher, counselor, Texas Education Agency employee), and I experienced it and observed it first hand.

Sincerely,
Jim Salmon & Mary Pruett


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