s you grow older, the ownership. Each year, the value
issue of wealth building of your home will increase or
comes front and center. decrease slightly based on market
Wealth building simply refers to prices. Over time, real estate
increasing the net value of your has always appreciated in value.
total assets. Wealth building In the current market, homes in
over time is one of the some parts of the country are
advantages of home ownership. appreciating at rates as high as
fifteen to twenty percent!
Building Equity Appreciation is a very popular
subject with homeowners.
Owning a home can help you build
wealth in two ways. First, you Wealth Building Example
build equity by paying down your
mortgage. A certain percentage of Let's look at a simple
each mortgage payment goes demonstration of how advantageous
towards a reduction in the total home ownership can be. Assume you
amount owed. Typically, payments buy a home in 2005 for $400,000
in the first few years of the and, for the purpose of simply
mortgage are primarily applied to mathematics, pay no down. Over
interest on the loans. As time the next 10 years, your mortgage
passes, however, more and more of payments reduce the outstanding
each payment is applied to the mortgage by $100,000 and the home
outstanding loan amount. Before increases in value to $600,000.
you know it, the $300,000 loan is The value of your home as a net
down to $50,000 and you've gained asset has grown to $300,000
$250,000 in wealth. [$600,000 minus $300,000]! If you
had rented during this period,
Appreciation is the second wealth you would have missed out on
building advantage to home $300,000 in wealth. This simple
example should show you the build wealth. If you don't
advantage of home ownership. currently own a home, you should
start looking for one.
Historically, home ownership is
one the best ways for families to
About the Author:
Raynor James is with http://www.fsboamerica.org - providing FSBO homes for sale by owner. Visit our "sell my home" page at http://www.fsboamerica.org/seller.cfm to list and sell your home for free for one month. Visit http://www.fsboamerica.org/buyer.cfm to see homes for sale by owner.
Source: www.isnare.com
