One of the best justifications for owning a home, at least
for financial reasons, is the tax savings that result from
deducting mortgage interest and real estate property taxes.
Under the current tax code, mortgage interest on first and
second homes is generally deductible as long as these loans
total less than $1.1 million.
To deduct property taxes and the interest paid on your
mortgage, you must itemize deductions rather than take the
standard deduction. For many homeowners, the combined
deductions for mortgage interest and property taxes easily
exceed the standard deduction.
As a home buyer, you may also be able to deduct fees charged
by the lender and closing costs. Contact a tax advisor for
details on how you can take advantage of homeownership tax
Other advantages of owning a home include:
Freedom to live the way you want to. You can customize
your home without having to worry about the landlordís
You can accumulate home equity. You can borrow against
the equity built up in your home to finance necessities
such as a college education, vacation, new car, etc.
Since the interest on a mortgage is usually low,
borrowing money against your home can be very sound. The
interest on home equity loans is usually tax deductible,
Stable monthly payments rather than rent payments which
typically increase each year. The principal and interest
portion of most mortgage payments remains unchanged for
the entire repayment period so you know exactly what
youíll need in the way of finances.
Home improvements that may increase the value of your
home. And your home improvement costs may be used to
reduce your capital gains tax when you sell.
Houses typically increase in value over time.