As we exit tax season, it’s a good time to remind ourselves of the substantial advantages of hom e ownership versus renting, for buyers.
These advantages include the following:
1. Mortgage Interest Payments: Mortgage interest is typically deductible for a primary residence, as well as a second home meeting given requirements; make sure your lender sends you Form 1098 each January, outlining the interest you’ve paid for the year, to take this deduction.
2. Mortgage Insurance Payments: Mortgage insurance payments may also be tax-deductible, typically helping certain low- and moderate-income homeowners, as well as first-time home buyers. Although restrictions exist, this deduction could potentially save you hundreds off your federal tax bill.
3. Points: While also known as mortgage origination fees, points are typically paid to the lender when purchasing a home, and this cost can be deducted if certain requirements are met.
4. Property Taxes: Property taxes are based on the assessed value of your property and may result in a sizeable deduction each year. These charges may already be recorded for you by your lender, on your mortgage interest statement. Real estate taxes may be deductable as well, if applicable.
5. Home Improvements: Keep purchase receipts for home improvements throughout the year to ensure you gain maximum benefit for this deduction.
6. Home Equity: Taxes on home equity loans or lines of credit may also be tax deductible, making them an attractive source of funds when needed.
With so many clear tax advantages, a home purchase may not only be a wise decision for the life of your family, but frequently proves an excellent investment as well! Put our team to work for you in selecting the home of your dreams, whether in Plano, Frisco, Allen, Richardson, Dallas or elsewhere in the DFW area. Working exclusively by referral gives us the ability to serve our clients at the highest level! Get in touch if you’re looking for someone to lean on through a very confusing and exciting journey of buying or selling a home.
Ryan Kirkpatrick
