If you are looking at buying your first home, you may be a little worried about what owning a home might cost you. While owning a new home can be expensive, the rewards for owning a new home begin when you turn the key in the lock for the first time and don’t end until you retire or sell the house. Here are some of the ways home ownership can affect your finances.

Buying Your First Home

One of the most expensive times in your life financially is when you buy your first home. Usually, when you buy your first home, you will have to put a percentage of money on your home as a down payment. You may also have to pay other fees, such as a title search and certification, and realtor commission. Nearly all homes, unless they are new, require some work in the home before you move in. You may also have moving expenses when you move into your new home. Most likely, buying a house is one of the most expensive times in your life.

However, you have benefits to home ownership that you may not have thought of. One of the biggest reasons you’ll want to buy a home is that depending on where you live, home ownership may offer you a federal, state, and even a local income tax deduction. This is a great benefit for your wallet come tax time.

Now That You Own a Home

Once you have owned your home for a few years, you may find that the value of your home is more than the total amount you still owe on the home. That means you have income invested in your home, and you may qualify for a home equity loan. Home equity loans are great if you want to do some large projects in your home. You may want to remodel rooms or even add some rooms to expand your home. For example, you may want to add a sunroom or a bedroom and bathroom onto your home. In general home equity loans are cheaper than other forms of loans, because they are based on the equity in your home that you have already paid in there.

You may also find that as your home increases in value, you may have offers to sell your home. This is especially true for homes that are in a hot market with a lot of demand. If you decide to sell the house, you may make a lot of profit and be able to afford a larger house.

There are other advantages of home ownership that have nothing to do with money. Your home may be located in a great school district where your kids can walk to school. There may be a lot of children in your neighborhood as well for your children to play with. This may not seem like a big deal, but it can be huge, because if there are a lot of kids in the neighborhood, your kids will always have someone to play with–which means you don’t have to entertain them.

At Retirement

When you retire, you have lots of options for your home. First, you may decide you want to keep your home because it is paid off. If your home is paid off, your income at retirement will be larger, as you won’t have to give some of your retirement income towards a house payment. Second, you may decide to sell your home, and pocket the cash. While this is a good idea, especially if you want to downsize, you may be intimidated by the thought of moving. Keep in mind that many retirees downsize and move to smaller homes.

What if you don’t want to sell your home, but you also don’t want to move? If the thought of leaving your kids or grandkids to sell your home gives you hives, or if you want an additional stream of income, you may try a reverse mortgage. You can figure out how much income you can get from a reverse mortgage based on this calculator. Reverse mortgages allow you to get a lump sum of money for your home, or a monthly check to add to your income. Best of all, you don’t have a mortgage. When you move out of your home, the company will then handle home sales and all those details for you.

No matter what you decide to do about your home, home ownership gives you great control over your financial future, with all of the perks of owning a home.

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