The Benefits of Being a Home Owner
Home ownership is the number one wealth builder in the United States. As a general rule, Tucson homes appreciate between four and six percent a year. That's a fairly decent rate of return for your luxury home investment, but your investment is worth more than this percentage of appreciation. Your return is much higher than four to six percent. This is partly because the Arizona tax laws subsidize home purchasing.
For example, if you buy a $200,000 home and put twenty percent down, that means your investment is $40,000. If your luxury home goes up five percent in value, that’s an increase of $10,000. Your $40,000 investment grew by 25%, and is now worth $50,000. And if you have a good credit rating, you may be able to buy a Tucson home with only three percent down - or less.
Of course, you're making payments on the loan, most of which is interest, and you're paying Tucson property taxes. However, Arizona tax laws allow you to reduce your taxable income by the amount you pay in interest and Tucson property taxes. Depending on your tax bracket, that can reduce your carrying costs.
If you put less than twenty percent down on your luxury home, you will also be paying Tucson mortgage insurance, which is not deductible. Most Tucson lenders will allow you to get a higher interest rate in lieu of mortgage insurance. Even so, you can always refinance once your luxury home appreciates - just choose a time with low interest rates and be sure the refinance makes financial sense.
One thing to remember is that if you didn't own your luxury home, you would be paying rent each month. Rent increases every year. Even if you have an adjustable rate, your mortgage payments will remain fairly stable and within a given range. And after you’ve been living in your home (without refinancing or taking equity out of your home), your homes mortgage payments will definitely become lower than someone renting a comparable Tucson home.
Sherie says: Remember, I'm here to guide you through the entire real estate process!
