What does it really cost to rent?
It’s staggering when you think about the cost of living, especially if you’re a renter and not a homeowner. If you are currently paying $1,000 a month for rented housing, then over the next three years, your property management company will effectively have reaped $36,000 of your hard-earned cash! You’re paying their mortgage when you could be building equity in your own property.
What if I don’t have the money to buy a home right now?
There are loan programs available that offer low and no down payment options. Some programs permit gift money as a down payment. There may also be government grants or down payment assistance programs that can get you in a home for equal to or less than many rental properties require up front for security deposit and first month’s rent.
There are many benefits of home ownership to consider, most of all, tax deductions. Let’s take a look at how advantageous this can be as a homeowner.
How much is tax deductible?
Tax deductions vary, but the IRS has laid out solid rules. They also have several tax publications full of helpful information worth taking the time to read. Publication 530, Tax Information for Homeowners, is very thorough, as is Publication 936, Home Mortgage Interest Deduction. For quick reference, you can refer to Tax Topics 505, Interest Expense, and 504, Home Mortgage Points.
These publications often refer to local and state guidelines, so you may want to consult a tax advisor to answer all the questions that arise from reading these materials. Here are a few tips you should know up front:
Many other taxes and costs can be tax deductible:
- Real Estate taxes can be deductible on a primary residence.
- Mortgage interest can be deductible on a loan to purchase, build or improve your home.
- Pre-paid interest can be deductible in the year it is paid.
- If you are building a home, the interest on the construction loan can be deductible.
- Other expenses may be deductible (consult with your tax advisor for additional assistance).
When you are ready to purchase your home, West Gate Bank has an experienced, local team of mortgage loan officers that are here to help!
