October 19 2017

Phishing Scammers Target Home Buyers

Phishing is when scammers utilize fraudulent means to gather personal information. Keep your finances and personal information...

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October 12 2017

How to Counter Bad Luck this Friday the 13th

The only Friday we don’t look forward to, the 13th! Here are 8 ways to counter the bad omen and improve your good luck this...

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October 10 2017

Refinance 101

Any decision affecting your mortgage is an important one. Learn more about what refinancing is to determine if it is the right...

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October 06 2017

Your Guide to FHA 203(h)

Did you lose your home due to a natural disaster? You may be eligible for an FHA 203(h) loan, which you can use to rebuild or...

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October 03 2017

6 Simple Ways to Save Money Around The Home

There are countless ways to save around your home – without altering your lifestyle. Consider these 6 simple steps to start...

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October 02 2017

Your FICO Score Range and Why It Matters

FICO scores are used in 90% of credit decisions to accurately understand your credit risk as a borrower. When you are obtaining...

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September 29 2017

FHA 203(k) - The Renovations Loan

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September 19 2017

These Grocery Stores Could Offer Value to Your Home

Do you live near a Whole Foods or Trader Joe's? These grocery stores may add value to your home according to Zillow study.

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September 11 2017

What Buying a Home Does to Your Credit Score

Your credit score will be affected in the mortgage loan process. Luckily for you, these are only minor and short-term dings that...

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Financial IQ February 06 2020

Tax Incentives for Homeowners*

The dream of homeownership comes with many financial incentives. These financial perks extend beyond the more obvious such as building equity and investing in your future, to the size of your tax return each year. Tax season is fast-approaching, so we thought it was a good time to cover the plethora of tax benefits related to owning a home!

Home Mortgage Interest Deduction

Homeowners who itemize deductions may reduce their taxable income by deducting the interest paid on their home mortgage. Homeowners are eligible to deduct interest paid on "qualified residence," defined as a taxpayer's main home or second home by the IRS. This interest can be deducted on loans up to $750,000. ($350,000 for a married homeowner filing a separate return)

Property Taxes Deduction

Deducting state and local property taxes is a major benefit to owning a home. Your state and local governments assess property taxes annually, based on the value of a property.  Property taxes paid at the state and local level are eligible for a $10,000 deduction, or $5,000 for married taxpayers filing separately. 

Mortgage Interest Credit

Lower-income homeowners who meet certain qualifications may qualify for a mortgage interest credit. This means by obtaining a mortgage credit certificate from your local government, you might be eligible to claim a portion of the mortgage interest you pay as a credit. This benefit only applies to new mortgages used for a taxpayer’s primary residence and the government entity must be contacted about obtaining an MCC prior to a borrower taking out a mortgage.

Mortgage Insurance Deduction

Should you secure a conventional loan and have a down payment that is less than 20% of the home’s purchase price, you may be required to pay for private mortgage insurance. 

The good news? PMI will be tax deductible through the end of the year. While this bill expired in 2017, an extension was placed through December 31st, 2020, meaning you can benefit if you already own a home. You may even qualify for filing an amended 2018 tax return!

There is a plethora of benefits to owning a home, but the above are some you may consider when filing your taxes for the April deadline. Get prequalified for a loan now to start taking advantage of these tax breaks for homeowners!

Sources:
IRS
U.S. News
Tax Policy Center

*Consumer should consult a tax adviser for further information regarding the deductibility of interest and charges.

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