As you’re thinking about how to resolve your troubled finances, selling your house – even at a loss – may be an option you’re considering. Before you make that difficult and potentially costly decision, you should remember some of the subtle advantages of home ownership.
First, the federal government’s principal tax law, the Internal Revenue Code, heavily subsidizes homeowners. For instance, the home mortgage interest deduction allows you to deduct from your taxable income the interest you pay on your home loan. For many taxpayers, this law results in thousands of dollars in tax savings every year.
Second, the home you purchased isn’t just a residence. It’s also a financial bet that home prices will appreciate and that you’ll benefit from the upside. In recent years, this bet hasn’t paid off the way it did in years past, but with the recovery picking up speed in states like Texas, future years may see future gains.
Finally, your home is a store of value. Though financial instruments like home equity loans, you can trade some of the illiquidity in your residence for liquid cash. This isn’t usually a good long-term financial strategy, but as a stop-gap measure during a financial shock to your family – such as a job loss or illness – this liquidity can come in handy.
These advantages are worth considering as you think about your financial future. If you’re facing debt-related problems, a financial workout with your creditors or even bankruptcy may be the right move. However, as you enter those negotiations, it’s important to remember what assets you value most highly.
Want to find out how the attorneys at Fears Nachawati can help you as you deleverage through a financial workout or personal bankruptcy? Want to find out if holding on to your home is a realistic possibility? Our attorneys and professionals are committed to helping people like you. Contact us today to learn more.