A few weeks ago I started an 8 part series on why you should consider buying a home. This week, I continue with the number 3 reason to buy a home. Keep reading to find out why!
Home ownership is the American dream. But what makes home ownership even better is that when you borrow to finance it, it becomes the taxpayers dream. If you itemize your taxes, you can deduct the interest on up to one million dollars of home mortgage debt as long as it is a primary home or a second home. Keeping in mind that most of your monthly payment in the beginning of the loan is towards mortgage interest, you can see how this would add up to quite a large savings. In fact, if you are in a 28% federal tax bracket, this can have the effect of lowering your borrowing costs by almost a third, depending on which state you live in. You can also deduct interest on an additional $100,000 of home equity debt. This is called the "Home Equity Loan" exception, and it allows you to tap into your home equity for any purpose, including home remodel and debt payoff.
As you can see, home ownership is a superb tax shelter and our tax rates favor homeowners. Doesn't this make you make you want to take advantage of home ownership now? Who wouldn't want all the tax shelters they can get?!?
Visit us again next week for #4 of 8: Property Tax Deductions
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Julie Montemarano can be reached at 303-888-3189 or ElitePropertyShop@gmail.com
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