Many people aspire to own a home one day, and the Roanoke Valley and Smith Mountain Lake markets are full of good choices! If you're considering whether to purchase your first home, you may wonder if the investment is worth it. After all, a home is one of the largest and most important financial commitments you will ever take on. Fortunately, owning a home provides a number of advantages. 

Mortgage interest is still deductible

While the Tax Cuts and Jobs Act modified the mortgage interest deduction, mortgage interest is still deductible within certain limits. Beginning in the 2018 tax season, married homeowners filing a joint return may deduct mortgage interest on total principal up to $750,000. The principal limit is $375,000 for married taxpayers filing separately.

To qualify for the deduction, the home must be the taxpayer's main residence or a second home. Investment properties do not qualify. The loan amount for the deduction may not be higher than the home's cost.

The deduction limits under the Tax Cuts and Jobs Act apply to loans that originated after 2017. The previous limits apply to loans that originated prior to 2017.

Always speak with a certified public accountant or tax professional for tax advice.

Roanoke-area rents are on the rise

While rents in the Roanoke region are lower than rents in many markets, they are creeping up. In 2017, we saw a 1.28% increase in median gross rent over 2016. That's less than the national average but far more than Virginia overall, which experienced an increase of just 0.17%.

Depending on your mortgage, buying a home can protect you from steep increases in housing costs. For a fixed-rate mortgage, the principal and interest payment (also known as P&I) remains the same over the life of the loan. You may see incremental increases in insurance costs and taxes. The longer you stay in your home, the better your house payment stacks up against area rents.

You'll build equity

Equity is the difference between your home's value and the outstanding balance you owe on your mortgage. It's the portion of your home you truly own. Every time you make a mortgage payment, you're building equity. Once you've built enough equity, you can take out a home equity loan or a home equity line of credit. These loans generally have lower interest rates than credit cards or other personal loans. Building equity gives you a chance to invest in improving your home, to buy a higher-valued home, or to finance large purchases.

Your home value will increase

Unlike other purchases, a home is likely to increase in value over time. How much a home's value will increase depends on what home improvements and upgrades are made, as well as local market conditions. As the value of your home goes up, so does the amount of equity you have.  

You can make it yours

When you're a renter, you don't always have a lot of options when it comes to modifying your home. If you want to paint your rooms in unusual colors, renovate your kitchen, or build a deck, you need to seek permission from your landlord. The ability to customize and personalize your living space is one of the biggest benefits of home ownership. You don't need anyone else's approval to renovate or to decorate your home to your heart's content.

You'll gain stability

People who own their homes stay in their homes four times longer than those who rent. Staying in one place gives you the opportunity to put down roots. You will be able to form friendships with your neighbors and become involved in the local community.  

If you'd like to talk more about the benefits of owning a home, I'd love to hear from you! Contact me anytime at sonya@sonyadickinson.com or 540-353-0213.