Dorothy Says, "There's No Place Like Home"

I have been in the mortgage /real estate business for over 12 years and I agree with Dorothy, "There is no place like home". It amazes me in the different mindsets between renters and home owners. Homer owners tend to take more pride in there surroundings. It means they can paint the walls, turn up the volume on the radio, attach a permanent fixture, and decorate to their hearts content with landlord penalties. Home ownership gives your family stability and security while providing a solid foundation to build upon.

I know that in today's market we are not thinking about depreciation. But over the years real estate has consistently appreciated 10-12% or better. Many people view their homes as a long term investment, a hedge against inflation.

Dorothy understood that home ownership has super tax benefits. Our current tax system favors homeowners. Why pay rent of $900-1000.00 per month will be only give the landlord significant long-term deductions as well as building wealth over time?

Dorothy understood that the taxes levied on her home could be utilized as a tax deduction for her primary home as well as a vacation home. Under the current tax system even if you are concerned about moving a short period of time (minimum of 5 years) you have the ability to exclude up to $250,000 for a single individual and $500,000 for a married couple from capital gains. This means that in today's buyer friendly market you can purchase a fixer-upper and obtain it at a ridiculously low price. In 5 years you can sell when the market corrects, without having incurred any additional tax burdens.

In closing, remember that with each payment you make having a good interest rate, a part of the payment will reduce your total mortgage obligation. David Bach author of Automatic Millionaires, states "You can start late and still finish first and a great place to start is home ownership."