As You Grow Older, The Issue Of Wealth Building Comes Front And Center. Wealth Building Simply Refers To Increasing The Net Value Of Your Total Assets. Wealth Building Over Time Is One Of The Advantages Of Home Ownership.Building EquityOwning A Home Can Help You Build Wealth In Two Ways. First, You Build Equity By Paying Down Your Mortgage. A Certain Percentage Of Each Mortgage Payment Goes Towards A Reduction In The Total Amount Owed. Typically, Payments In The First Few Years Of The Mortgage Are Primarily Applied To Interest On The Loans. As Time Passes, However, More And More Of Each Payment Is Applied To The Outstanding Loan Amount. Before You Know It, The 300,000 Loan Is Down To 50,000 And Youve Gained 250,000 In Wealth.Appreciation Is The Second Wealth Building Advantage To Home Ownership. Each Year, The Value Of Your Home Will Increase Or Decrease Slightly Based On Market Prices. Over Time, Real Estate Has Always Appreciated In Value. In The Current Market, Homes In Some Parts Of The Country Are Appreciating At Rates As High As Fifteen To Twenty Percent! Appreciation Is A Very Popular Subject With Homeowners.Wealth Building ExampleLets Look At A Simple Demonstration Of How Advantageous Home Ownership Can Be. Assume You Buy A Home In 2005 For 400,000 And, For The Purpose Of Simply Mathematics, Pay No Down. Over The Next 10 Years, Your Mortgage Payments Reduce The Outstanding Mortgage By 100,000 And The Home Increases In Value To 600,000. The Value Of Your Home As A Net Asset Has Grown To 300,000 600,000 Minus 300,000! If You Had Rented During This Period, You Would Have Missed Out On 300,000 In Wealth. This Simple Example Should Show You The Advantage Of Home Ownership.Historically, Home Ownership Is One The Best Ways For Families To Build Wealth. If You Dont Currently Own A Home, You Should Start Looking For One.
