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    As a real estate agent, it may seem obvious that there are a multitude of benefits to becoming a homeowner. However, it’s important to remember that even though those advantages are evident to you, your clients will not always have the same knowledge base. You should always take the time to explain the benefits of homeownership to your buyers, especially first-timers.

    To that end, we’ve listed the four key benefits below. Read them over to give yourself a refresher, so that you can educate your buyers in the best way possible.

    1. Explain the importance of building equity

    First and foremost, you will want to explain the importance of building equity. Luckily, there are a whole host of statistics that you can use to illustrate your point. In its most recent Survey of Consumer Finances, for example, the Federal Reserve found that the average net worth of homeowners was 46 times greater than that of renters.

    In this instance, it is best to be sure to start with the fundamentals. Explain what equity is, how it works, and how eventually your clients should be able to leverage it to improve their property or to buy something new.

    Point out that, by paying rent, they’re currently helping their landlord build equity rather than putting that money back into their own pockets.

    2. Point out the potential tax benefits

    Next, you should take the time to illustrate the possible tax benefits that becoming a homeowner can provide. In particular, the two biggest deductions to highlight are mortgage interest and property taxes. However, it doesn’t hurt to mention that they’ll also have the option of writing off additional expenses such as any mortgage insurance premiums and home office expenses.

    Keep in mind, though, that the passage of the Tax Cuts and Jobs Act has changed the tax landscape significantly. The law limits mortgage interest deductions to $750,000 of total mortgage debt. There’s also a limit of $10,000 in state and local taxes, including property taxes.

    That said, if they have questions regarding the specifics of their tax situation, your best bet is to recommend that they speak to a tax professional. Try to stay away from getting too in in-depth about a particular scenario in order to limit your liability.

    3. Illustrate how borrowing can affect their credit score

    Since few buyers — especially first-time homebuyers — can afford to purchase their home with cash, odds are that your clients will be getting a mortgage. Obviously, taking out a loan of that size is going to have an effect on their credit scores. However, you’ll want to take some time to go over the ways in which those effects can take place.

    In particular, it’s essential to clarify the importance of maintaining a stable payment history. After all, payment history accounts for 35% of a borrower’s FICO score. Explain to them that if they consistently make their mortgage payments on time, and nothing else really changes on their credit report, it’s likely that they will see their scores improve. However, point out that if they miss payments, their scores could go down as well.

    In addition, you should also touch on credit diversity. That measurement accounts for an additional 10% of a borrower’s score. Briefly point out that having a stable payment history across multiple types of loans — mortgages included — can help their scores. By adding a mortgage to their credit history, they’ll be adding more diversity to their financial profiles.

    Again, if they have specific concerns about their credit score, you should encourage them to talk to their lender or another financial professional.

    4. Let them know they’ll be free of renters’ concerns

    Once you have those benefits covered, take some time to talk about the peace of mind that comes with owning your own property. For one, owning a home will hopefully give your clients more financial stability in their lives. For example, there’s no more worrying about rent hikes at the end of their lease.

    Additionally, they won’t have to deal with any of the rules that they’re subject to now as a renter, such as not being allowed to put holes in the walls or to paint. Since they will own the property, they’ll be free to decorate and to improve it however they see fit.

    The bottom line on homeowner benefits

    While the benefits of homeownership may seem obvious as an industry professional, for a lot of buyers, that is simply not the case. Many younger buyers, in particular, want to own a home, but feel that it is simply out of their reach. By educating them about how they can possibly benefit from homeownership, you’ll assist them in taking steps to secure their financial future.

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