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Your Taxes - Renting? Look at this!
First-Time Homebuyers Information
Now Uncle Sam will subsidize a portion of your monthly payment. Let's explore the tax advantages of owning versus renting:
Tax deductions you'll receive:
- Interest you pay on first and second mortgages up to $1 Million is generally tax-deductible.
- Property taxes are deductible
- On a purchase, any points paid to reduce your interest rate are deductible in the year they are paid
Let's look at just how big a subsidy you could potentially receive if you bought a $200,000 home with a $180,000 mortgage at 7%. The first years' interest would be $12,542 and the property taxes would be $2,500. Here's what you'll save:
Tax savings total: $4,211 or $350 per month. The total
payment on this $180,000 loan with principle and interest,
taxes and insurance included is $1,445. The effective payment is only
$1,095.
In this example, Uncle Sam will subsidize $350 of your house payment. At our Pre-Approval Consultation I will do a personalized Homebuyer Tax Analysis™ for you.
How can you not choose buying over renting with this kind of help? And, this doesn't even take into account the fact that you are purchasing an asset that historically has continuous appreciation.
Another Great Tip
Many people think that owning a home will only benefit them at the end of the year via a refund on their taxes. Not so! If you would like to realize the above subsidy benefit of $350 on a monthly basis, you can. Just consult with your tax preparer/advisor to see how much you should adjust your withholding exemptions so you take more home from every paycheck. That way, you can realize the tax savings immediately.
I can provide you with the figures for your particular buying situation at your initial consultation. I will also talk with you to determine if paying points makes sense for you.
Cherry Creek Mortgage
4301 Hacienda Dr. Ste. 120
Pleasanton, CA. 94588
Phone 800-325-2062
Fax 925-520-0231
