How Your Home is an Investment

A home investment is a big financial step for most people. Spending many thousand dollars is not something that you do very often. Therefore, when you make the step, you should understand why a home is a good investment, besides simply providing you with shelter. Here are a few ways that your house can be a productive investment for your financial future.

Forced Savings

When you buy a house, you are basically forcing yourself to save money. The value of real estate will never be zero. Therefore, your house will always be worth something. When you make your monthly mortgage payment, you are paying interest and principal. When you pay down the balance, you are basically saving money. When you refinance or sell the house, this money will be available to you.

Appreciation

Despite the occasional down period in the market, real estate generally appreciates every year. As a general rule, houses increase their value about every 10 years. Therefore, if you continue making your payments faithfully, you will have made money on the appreciation of the house. By the time you are ready to sell or refinance, you usually gain equity.

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