What is the Tax Benefits of Owning Your Home?

Tax Benefits of Homeownership

The tax deductions you’re eligible to take for mortgage interest and property taxes greatly increase the financial benefits of homeownership. Here’s how it works.

Assume:

$9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest)
$2,700 = Property taxes (at 1.5 percent on $180,000 assessed value)
______

Total Deduction = $12,577

Then, multiply your total deduction by your tax rate.

For example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56

$3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate)

Note: Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased when total income reaches a certain level.
 
Posted By

Meena Verma

Email:  meenahomes@gmail.com

Real Estate Professional

Admiral Real Estate

Everett, WA

Mortgage Affordability

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How Big of a Mortgage Can I Afford?
Not only does owning a home give you a haven for yourself and your family, it also makes great financial sense because of the tax benefits — which you can’t take advantage of when paying rent.
The following calculation assumes a 28 percent income tax bracket.
If your bracket is higher, your savings will be, too. Based on your current rent, use this calculation to figure out how much mortgage you can afford.
Rent: _________________________
Multiplier: x 1.32                                            
Mortgage payment: _________________________
Example:   $900 Rent  x  1.32 = Mortgage Payment of $1188
Because of tax deductions, you can make a mortgage payment — including taxes and insurance — that is approximately one-third larger than your current rent payment and end up with the same amount of income.
 
For questions or more information, email Meena Verma at meenahomes@gmail.com
 
 
 
Meena K. Verma

Real Estate Professional
Admiral Real Estate North

13410 Hwy 99 S  Suite 101
Everett, WA  98204
Cell: 360-540-5566
Office:  425-953-5678
Email:  mverma@admiralre.com

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