Homeowner Tax Benefits

This BLOG On Homeowner Tax Benefits Was Written By Gustan Cho

There are so many advantages of Buying Versus Renting a home but one of the top benefit is the homeowner tax benefits a homeowner gets where it does not apply for a renter. Homeowner Tax Benefits are often ignored by home buyers, especially first time home buyers. Besides Homeowner Tax Benefits there are other great benefits of being a homeowner versus a renter as well. However, on this article we will mainly concentrated on Homeowner Tax Benefits. Here are the various benefits of being a homeowner versus a renter:

  • Homeowner Tax Benefits
  • There are many more financial benefits to owning a home versus renting on top of Homeowner Tax Benefits which we will discuss
  • Homeowners have the luxury to do decorations to their home without asking for permission from the landlord or property management company
  • As a homeowner, you have your own place and freedom to raise your children and raise your family
  • Owning your own home gives you the freedom and right without asking your landlord in being able to spend your time with family, relatives, friends, without asking permission from your landlord on friends and family staying over at your place on an extended stay

Financial Benefits On Top Of Homeowner Tax Benefits In Owning A Home

There are many more benefits on buying a home versus renting. Homeowner Tax Benefits can save homeowners tens of thousands of dollars. The interest on your monthly mortgage payments can be deducted from your income tax returns. The Homeowner Tax Benefits is great savings for every homeowner where it does not benefit renters. The majority of our monthly mortgage payments when you first get a home loan will go towards your interest payment of your mortgage.

Here is how Homeowner Tax Benefits work with interest expense:

  • Homeowner Tax Benefits is only available to homeowners and not renters
  • When you first purchase a new home and have a mortgage, the majority of your monthly principal and interest payments will go towards your interest of your mortgage
  • In the event if your mortgage loan balance exceeds $1,000,000, the Internal Revenue Service will be limiting your interest deductible
  • Home equity debts that is up to $100,000 are also deductible on your income tax returns which means that on a cash out refinance mortgage or second mortgage/Home Equity Line Of Credit, those mortgage interest can be deductible as well
  • Mortgage Interest is also deductible on second and vacation homes as well as other homes a borrower has

Here is how Homeowner Tax Benefits work with property taxes on your home:

Home buyers who put less than 20% down payment on Conventional Loans need to have their property taxes and homeowners insurance in escrow and that is part of their monthly mortgage payment. Your monthly mortgage payments consists of the following:

  • Your principal payment
  • Your mortgage interest payment
  • Your property taxes
  • Your homeowners insurance

Homeowners can deduct their property taxes on their income tax returns as long as they own the property.

How Discount Points Can Be Homeowner Tax Benefits

Discount Points is when a home buyer pays a premium upfront in order to get a lower mortgage interest rate. One discount point is equivalent to 1% of your mortgage loan amount.

Here how Homeowner Tax Benefits work with POINTS:

  • A borrower can deduct discount points they have paid to lower their mortgage interest rates on the year that the borrower paid for the discount points and only if the mortgage loan was for a primary owner occupied residential mortgage
  • Borrowers who went through a refinance mortgage loan or had to take out a second mortgage or a Home Equity Line of Credit and paid down their mortgage interest rates with by paying discount points can deduct the points they paid. It is recommended that borrowers contact their accountant for clarification and what applies for them
  • Not everything is tax deductible and mortgage borrowers should not assume that a loan officer’s opinion is right when a loan officer tells you homeowner tax benefits. Second opinions is always recommended when making such a big financial decison

Qualifying For A Mortgage With The Right Lender

If you have any further questions on this article, please contact Gustan Cho and The Gustan Cho Team. The Gustan Cho Team represents a national FANNIE MAE, FREDDIE MAC, GINNIE MAE mortgage lender who is licensed in 50 states with a national five star reputation for no lender overlays.

Here are some of the loan programs The Gustan Cho Team are experts in:

  • FHA Loans And VA Loans With No Lender Overlays
  • FHA Loans And VA Loans With Bad Credit
  • FHA Loans And VA Loans With 580 Credit Scores
  • USDA Loans With Lender Overlays
  • Conventional Loans With No Overlays
  • Non-QM Loans
  • Jumbo Mortgages will less than 20% down payment
  • Reverse Mortgages
  • FHA 203k Loans

Gustan Cho NMLS 873293 Of The Gustan Cho Team

  • Email: gcho@gustancho.com
  • Direct: 1-262-878-1965
  • Cell: 262-716-8151 Please Text For Faster Response With Contact Information Including Email Address
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The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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