[Guest Post by Jessica Darnbrough]
While the first benefit of home ownership is the security of having a roof that you own over your head, there are actually a few other benefits that you might not have thought of. Read on for three new reasons why you may want to consider looking at home loans sooner rather than later.
The Australian Tax Office does quite a lot to encourage people to purchase a home, most of which comes from the many deductions that are allowed on the costs of home ownership. Property owners can claim deductions on a large range of expenses and if the property is rented out, then that list grows even longer. Homeowners can claim deductions on the mortgage interest that they pay; government taxes such as stamp duty, council rates and land tax; real estate agent sales and management fees; advertising costs involved with finding tenants; building and landlord insurance; the stationery, phone, internet, postage and travel costs involved with running the property; repairs, maintenance, gardening and pest control; depreciation on the building and its fixtures and fittings; and the costs involved in obtaining a home loan and the yearly fees incurred.
Improved credit rating
Another benefit of having a home loan is that it can quite radically improve your credit rating. Pay off your mortgage in a timely fashion and you’ll find your score improving significantly over time. Financial institutions will see your ability to make regular, scheduled mortgage repayments as a good sign that you are a responsible person and have a steady income to rely on. This will help them to see you as a good borrower for any future loans.
New doors opened
Home ownership can open doors to easier finance in other areas, such as acquiring funds for a car loan or to start up or invest in a business. An improved credit rating from regular mortgage payments can make it much easier for banks and other financial institutions to see that you are worthwhile taking on as a customer and not a big credit risk. Also, by taking out a home loan rather than paying outright for a property, you could find yourself with spare funds available that could be used to send your children to university or to help them invest in their own first home. You could also use the funds to renovate the property you purchase and potentially increase its value as a result.
Jessica Darnbrough is head of corporate affairs and company spokesperson at Mortgage Choice. She is passionate about property and helping potential buyers understand the home loan options that are available to them
[Photo by woodleywonderworks]