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 home owner. 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, and often sellers are willing to make a contribution to your purchase if they want to sell the home quickly. And in many places government grants or Down Payment Assistance programs 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 First-Time 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 CPA 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 are also tax deductible:
- Real Estate taxes are deductible on a primary residence.
- Mortgage interest is deductible on a loan to purchase, build or improve your home.
- Pre-paid interest is deductible in the year it is paid.
- If you are building a home, the interest on the construction loan is deductible.
- Other expenses may be deductible (seek the advice of your mortgage & Tax advisors).
Contact me to discuss your specific needs and we’ll find the program that’s right for you. We have a variety of low down payment and no down payment programs available.
We hope this information is helpful in understanding some of the important steps for buying a home, but of course if you do have any questions please don’t hesitate to ask.