Mortgage California Blog

A House Remains a Great Shelter from the Storm

April 13th, 2011

Knight Kiplinger, editor-in-chief of Kiplinger’s Personal Finance, reminds homeowners and home buyers that an investment in a home not only a sanctuary for you and your family, it also remains a great tax shelter.

The ability to deduct property taxes is “the last great tax shelter” and you get a tax break on a large part of the profits if you decide to sell in the future, Kiplinger says.

Kiplinger speculates that for some years to come, home values will not rise much more than the national level of inflation. Values will still rise but they won’t skyrocket, he says. That means that, unlike in the bubble years, when you buy a house now, you can’t expect to make a huge profit if you sell the house in a year or two.

But speculating in real estate is not the most important thing homebuyers are looking for. Rather, they visualize the place they want and search for more comfort, convenience and enough space, a home where they can relax and raise their families.

Some look forward to living in the same home for many years. They dream of holiday gatherings in the homestead with their children and grandchildren.

A home is the largest investment most people will ever make and it is the most desired investment. Fortunately, thanks to the modern mortgage system, people don’t have to save for decades to afford a house.

Low mortgage interest rates give the practical-minded another reason to move forward with housing plans. While the average 30-year mortgage interest rate is about 4.17 percent, some mortgage companies are offering even lower rates. While rents rise every year, fixed mortgage payments stay the same.

Some retirees want to age in place, that is, keep their home for years after they retire. Others want to downsize. If less space is what they want, that problem is easy to solve.

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