Owning a home can be an exciting and overwhelming adventure. You can paint the walls, improve your property and listen to music as loud as you’d like. Owning a home allows you to choose the school district, neighborhood and community you feel comfortable in. While the “pride of ownership” is definitely a driving factor in owning your own home, there are many monetary benefits to owning a home as well.

Equity – One of the best reasons to own a home is the equity you’re building. Each month, you are paying down the principal balance on your mortgage. Your loan amortizes in a way that allows for each payment to pay down more principal than the last. So, while the first few years of home ownership won’t build you a ton of equity, each passing year adds more than the last. Even when you’re paying down a small amount of principal, it’s still better than paying rent, which you will never see again.

Tax Deductions – Did you know that both your mortgage interest payment and your property taxes are tax deductible? That’s right, as long as your mortgage balance is smaller than the price of your home your interest is fully deductible. This is great news for new homeowners, whose mortgage payment is mostly interest in the first few years. Property taxes are also deductible on both your primary residence as well as a vacation home.

Appreciation – Although many homeowners took a hard hit from the recent recession, it’s widely understood that real estate is a cyclical market. Sometimes your home’s value will be up, sometimes it will be down, but until you need to sell, it won’t have any effect on your investment. Many people consider their home a great investment that will grow over time.

Capital Gains Exclusion – If you like buying fixer uppers, living in your remodeled home for over two years can save you thousands in capital gains taxes. That’s right; you can exclude a profit of $250,000 for an individual or $500,000 for a married couple from capital gains by living in your home for at least two of the past five years. Even if you aren’t into remodeling, and you just happen to buy at the right time, your profit can be excluded.

Now’s the time to buy! It’s a buyer’s market, with near-bottom prices and great interest rates. If you’re at Cherry Creek homes for sale, please contact a Denver real estate agent.

About PorchLight Real Estate: PorchLight Real Estate Group has the most experienced and knowledgeable Denver real estate agents in Colorado. For more information about homes for sale in Denver CO or specific neighborhood homes please visit www.porchlightgroup.com.

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