Rick BissonJune is National Homeownership Month. In response, National Association of Realtors President Elizabeth Mendenhall, issued the following statement: “National Homeownership Month is a time to celebrate and promote the modern American Dream of owning a home.”

Mendenhall continued, “Homeownership changes lives and enhances futures, and many Americans see it as one of their greatest hopes.”

Becoming a homeowner comes with a lot of responsibility, however, there are a great many rewards, as well. Below are highlights of many of these benefits to homeownership.

Good investment: While home prices move in cycles over the short-term, if an individual stays in their home for a period of time, it could increase in value and give them a substantial return on their investment.

In order for an individual to take advantage of this benefit, it’s important that, to the best of their ability, they purchase a home at or below market value and/or sell their home in a market similar to the one they bought it in.

This means if the home was purchased in a seller’s market when home values are up, then the best return on their investment is realized when market conditions favor the seller.

Build equity: Every month a homeowner makes a mortgage payment, the principal portion of the payment increases. The principal payment is lowest on their first payment and highest on their last payment.

Thus, with each monthly mortgage payment made, a portion goes toward reducing the amount owed on the loan, which increases equity.

In a sense, paying the mortgage every month and reducing the amount of the principal is like a forced savings plan. Each month homeowners with a mortgage are building up more valuable equity in their home.

Home equity line of credit: When necessary, homeowners can borrow against their home’s equity to meet a variety of financial needs, including home improvements, education or medical expenses.

A home equity loan or line of credit can also be used to pay off high interest credit card debt, since the interest rate is generally lower and the interest payments are tax deductible.

Tax deductions: Owning a home can reduce an individual’s income taxes each year. The tax code allows homeowners to deduct the mortgage interest and property taxes from their tax obligations. The year a property is bought, certain closing costs and loan discount points also may be tax deductible.

In the early years of the mortgage, when interest represents the bulk of the monthly mortgage payment, these tax deductions can put a significant amount of money back in an individual’s pocket.

Capital gains exclusion: If an individual buys a home to live in as their primary residence for more than two years, than they will qualify for capital gains exclusion. This means when they sell, they can keep profits up to $250,000 if they are single, or $500,000 if they are married, and not owe any capital gains taxes.

You build a strong credit history: When an individual buys a home and consistently makes their monthly loan payments on time, it demonstrates to other lenders that they are a good borrower and the risk of them defaulting on a loan is low.

This strong credit history will be helpful in the future when they need other loans for buying a car, making improvements to their home, or paying other major expenses.

A place to call home: Homeownership offers tremendous freedom to create the living environment that individuals have always wanted. They can own pets, paint rooms, make flooring changes – all without having to get approval from a landlord.

If you, or someone you know, is looking to buy, sell, or invest in real estate, be sure to contact your local lender and trusted, expert Realtor. They can advise you as to whether home ownership makes the most sense for you and if so, how to make get the best return on your investment.

This column is produced by Rick Bisson and his family, who own Bisson Real Estate with Keller Williams Realty of Midcoast and Sugarloaf.