You are in the process of buying a new home for your family. There are MANY costs that are added when you are the buyer or seller. Since you are the Buyer, did you know that you can deduct some of the expenses that you pay when you finally close? Yes, there are tax advantages for home ownership, and I am going to share them with you.
Points – If you pay any points for getting your new mortgage, you can deduct the dollar amount on your taxes. What are points? When you obtain a new mortgage, there is usually a loan origination fee and that is usually a percentage of the loan amount, which is called ‘points’. You can also pay points to reduce the interest on your loan. The more points you pay, the lower the interest rate will drop. Often it is called Pay-Down Points. You can deduct the points on your taxes in the year they are paid.
Mortgage Interest – This is the interest that you pay the bank for using their money to buy your home. Each year, you will receive a statement showing how much interest you paid for your home. Make sure to give this information to your tax professional so they can properly prepare your tax return.
Mortgage Insurance Premium – This is a fee you pay if you obtained an FHA mortgage or a mortgage with less than 20% down. PMI is a way for mortgage lenders to protect themselves in the unfortunate event that a client can no longer make their mortgage payments and defaults on their loan. This covers the lender and not the borrower.
These are a few deductions that you can claim on your taxes when buying a home. Make sure that you consult your tax professional to ensure that you qualify to take these deductions. We hope that you found this information helpful. That is what Team Tork is all about: giving great information and education to the community. If you are in the market to buy your next home, or thinking of selling your home, call me. I have the experience and knowledge to get the job done. Call me directly at 651-379-4138 or 651-210-1038, or if you would rather, send me an email to Joey@TeamTorkRealEstate.com. We have more educational information on our website: www.TeamTorkRealEstate.com.