You spent months (maybe even years) reducing debt, paying off credit cards and re-financing high interest loans. You finally got your credit score north of 750. You saved enough for a substantial down payment and have a debt-to-income ratio at or under 36%.
Is it finally time? Are you ready to buy a home in Colorado Springs?
Owning a home is one of the best ways to start building future wealth. Instead of paying a landlord, you pay down your mortgage and build equity in something that belongs to you. It’s said that a mortgage is essentially a forced savings account—this is true for homeowners everywhere, becoming even more lucrative if you own a Colorado Springs home in 2020.
Why? Because The National Association of Realtors has identified Colorado Springs as “one of 10 markets expected to outperform over the next 3-5 years.”
“Potential buyers in (Colorado Springs) will find conditions especially favorable to purchase a home going into the next decade,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, CA. “The dream of owning a home appears even more attainable for those who move to or are currently living in (Colorado Springs).”
So if you’re renting here in Colorado Springs or relocating to the region, it might be time to strike while the proverbial iron is hot. And right now, the Colorado Springs real estate market is smoking hot.
Here are 5 reasons why buying a home in Colorado Springs is a wise financial move…
- Homeowners Are Happier Than Renters. A recent study conducted by Bank of America indicates that nearly all homebuyers are happy they stopped renting. Based on a national study that surveyed more than 2,500 people, a whopping 93% of respondents who bought a home said they were happier than when they rented. Eighty-eight percent of homeowners agree that buying a home is the “best decision they have ever made,” with 42% viewing a home as a financial investment. Oh, and the fact that a mortgage is more or less fixed while rent often rises year after year is enough to put a smile on anybody’s face.
- Appreciate the Equity. Sure, real estate is cyclical, but we’ve already established the upward trend and continued growth expected in Colorado Springs. And regardless of where you own your home, real estate has consistently appreciated year after year. So instead of renting and building your landlord’s equity, homeowners establish and build their own equity that can be a major financial resource down the road.
- Ease Your Tax Burden. Mortgage interest, and property tax, and preferential treatment, oh my! The deductions, breaks, and rates come tax season always favor homeowners, it’s that simple. The recent Tax Cuts and Jobs Act has changed the standard deduction amount, but your mortgage interest can still be itemized and is deductible on your tax return. You’re also entitled to tax breaks for paying property taxes. And don’t forget about preferential tax treatment upon the eventual sale of your home. Ultimately, owning a home will make you a little less beholden to Uncle Sam by reducing your taxable income.
- Get a loan secured by the value of your house. In need of a large sum of money in a short amount of time? Better still, a loan with a lower fixed interest rate? Most homeowners are in prime position to qualify for just such a thing—the coveted home equity loan. Borrowing against your home is a great way to pay off high interest debt, or can be used for a variety of other life-changing reasons: home improvements, college tuition, medical bills, starting a business, and so on. Bonus…you can claim a tax deduction for the interest you pay on the loan if it’s for home improvements, making reason #3 even more advantageous!
- Pocket the Profit. Speaking of capital assets, owning a home is a great way to build wealth without paying capital gains. If you’ve lived in your home for two of the past five years, you can exclude your profit from capital gains, free from taxation—up to $250,000 for an individual or $500,000 for married couples.
There you have it. Aside from the pride of ownership that comes with buying and living in your house, there are so many undeniable financial benefits that come with owning a home.
And if you’re looking in Colorado Springs, or anywhere in the Pikes Peak region, you won’t find a better time to make your move, lock in your investment, and start building your net worth.
For more information on Colorado Springs real estate market conditions, and to start your home search and buying journey, contact Tanya Stevenson at (719) 548-9900 or visit ParkAvenuePropertiesCO.com!