Weekly Mortgage Memo

Today’s Topic: Benefits of Home Ownership

Anyone reading this is probably on board with the benefits of owning a home.  I won’t speak to the improved quality of life home ownership provides but rather my area of expertise – the net tangible financial benefits.  Owning a home can provide those benefits in three ways:

Equity from monthly payments

o   On a 30 year loan your payments generate 2% – 5% equity per year.  After 5 years in the house your payments will have  paid down the note by about 10%

o   On a 15 year loan your payments generate 5% – 9% equity per year.  After 5 years the note will have been paid down 27%

Equity from appreciation

o   I’ve looked at several neighborhoods around the metro and there can be some pretty dramatic ups and downs from year to year but over time (10-20 years) you can expect a 2.5 – 3% increase in home value per year.  The time frame I looked at includes the “Great Recession”

Tax benefit

o   When you buy a home you can deduct:

• Interest
• Property Taxes
• Mortgage Insurance (income limits apply)

o   You do, however, have to have enough deductions to itemize.  When you itemize you can also count other deductions (state taxes, charitable giving for example)

I tell my clients that you have to live somewhere.  When you pay rent you’re paying someone else’s mortgage.  When you own a home on a 30 year loan you can expect to add about 5% per year of the home’s price/value to your balance sheet.  So for every $100,000 of home you own 5 years will add about $25,000. Home ownership is the #1 wealth builder in the country!!

(Provided by Tom Davies and Taylor Ortiz)

Taylor Ortiz

Mortgage Loan Officer for Edmond Mortgage

2575 S Kelley Pointe Parkway Suite #180, Edmond, OK 73013

Office phone: 405-513-7805 Mobile phone: 405-509-1064

NMLS# 449866