Home Ownership: The Great American Dream

The best real estate agent is someone who can provide you with a home that fits your preference. Of course, who doesn’t want to own a house? To encourage and foster this dream, Congress has over and over again enacted tax legislation which favors homeowners. Without a doubt, Congress tax laws differentiate against renters, by giving unequal and unfair tax benefits to those who have owned homes.

Every four years, a few candidates for high political office try to focus and attention on equalizing the tax laws, and repealing the benefits of home homeowner.  But these influences have constantly fallen on deaf ears. That’s why this coming election year is no different. All the best real estate agent understands the importance of this political exercise. For those who have their own homes, here is a list of the tax deductions available to the homeowner. Every year, you are tolerable to deduct the following expenses:

Taxes: Real property taxes (both state and local), can be deducted. However, it should be renowned that all real estate taxes are only deductible in the year in which they are actually paid to the government. Thus, in the year 2015, your lender held in escrow monies for taxes due in 2016, you file your 2015 tax return if you cannot take a deduction for these government taxes. Inquire from the best real estate agent to further assist you in this.

It is important to send an annual statement to borrowers with a mortgage and advance lenders are required by the end of the first month of each year, reflecting the amount of interest of mortgage and taxes on real estate, the homeowner paid in the previous year.

Mortgage Interest. Interest rate on mortgage loans for first or second home is completely deductible, subject matter to the following limitations: getting hold of loans up to $1 million, and equity home loans up to $100,000. But you are married, if file independently; these limits are split in half.

It is most important to understand the concept of an acquisition loan. To be eligible for such a loan, you must construct, buy or substantially improve your home. The excess amount will not qualify or not meet the requirements as an acquisition loan if you not use all of the excess or intemperance to improve your home. However, any other intemperance may meet the criteria as a home equity loan. Seek for the best real estate agent to ensure that you have everything ready for a home loan application.

For example: A number of years ago, you purchased your house for $150,000 and you will obtain a mortgage in the amount of $100,000. The Previous year, your mortgage had been reduced to $95,000; however,  your house was net worth $300,000.

For the reason that, last year the rates were low, you refinanced the mortgage and also able to get a new mortgage of $175,000. Your acquisition is $95,000. Since in under $100,000, the additional $80,000 that you take out of your equity does not meet the criteria as acquisition indebtedness, but it qualifies as if there was a home equity loan. That’s why the left over interest is treated as personal interest, and this interest is not deductible. This can be explained thoroughly by the best real estate agent you know.

Points: When you get a mortgage loan, some lenders will agree with you to pay one or more points to get that loan. When you pay, the more points, then the mortgage interest rate should be less. Whether to refer as “loan origination fees,”  “discounts” or,” premium charges” these are still points. Each point has one percent of the amount borrowed; if you acquire a loan of $170,000, each will cost you $1,700.

If points are paid by the sellers, the IRS has ruled that even, they are still deductible by the buyer of the home. When you refinance a current mortgage, then points paid to a lender are not fully deductible in the year in which they are paid; you have to assign the amount over the existence of the loan. Ask the best real estate agent in your vicinity about this option.

Needless to say, if you have any query or questions about related to tax benefits, discuss them with your financial and legal advisors or the best real estate agent you trust.