For most people, buying a house is one of the biggest decisions they will ever make and that can lead to buyers having cold feet. Home ownership remains on of the best ways to increase personal wealth. Each month when you make your mortgage payment a portion goes to the principal of the loan, meaning that the amount you finance will go down over time, building equity. That equity is like a forced savings account. You have it if you don’t touch it, and it can be there to help you buy your next house, consolidate debt, make renovations, or simply to help with college tuition. Even with this advantage there are still potential buyers out there who are on the fence. For those who need that extra push the tax savings of owning a home might be just the push they need to jump into homeownership.
It’s tax time & owning has its rewards. Every year during tax time people scramble to find deductions. One extremely lucrative deduction is a mortgage deduction. A huge benefit to owning a home is the ability to deduct the mortgage interest from your tax obligations. For some, this is a huge deduction especially in the early years as you are paying more toward interest than the principal balance.
Don’t forget that the first year of owning your home, some of those fees you paid in closing cost can be deducted. Homeowners have the ability to claim the points paid at closing. More often than not, the fee collected is 1% of the loan amount, providing considerable savings.
Real estate property taxes are also considered for deduction.
Again, buying a home is a very personal decision and one that can earn you great reward. From landscaping your front yard, to building a swing set in the back, to investing in your future financial portfolio; we are here to help you through the process and provide advice to help you make a very savvy decision.
Advance Financial Group is not a tax advisor, for further information regarding tax benefits please contact a tax advisor.
Traci Waller (NMLS #80888) is a mortgage loan officer with Advance Financial Group a division of Monarch Mortgage.