Financial Benefits of First-Time Homeownership

If you’re a first-time homebuyer, you need a mortgage lender who can do more than just find you a decent loan option. You need someone who can walk you through all the potential pitfalls of the process, but also a pro who can explain some of the benefits of first-time homeownership that you may not have known.

At Mortgage Investors Group, we’re a mortgage company that does all of the above and much more. Did you realize that owning your first home often comes with numerous financial benefits, both in tax and other areas? Here are some basics to know.

Tax Benefits

There are several potential tax deductions you could be eligible for as a first-time homebuyer:

Interest deduction: At the end of each year, your mortgage lender will send you a 1098 form with information for your tax forms. In many cases, while itemizing deductions you’ll be allowed to deduct your entire interest amount paid on your mortgage for the year.

Real estate taxes deduction: Whether you pay property taxes individually or through an escrow account you have set up, these can be deducted on itemized deductions.

Points deduction: If you use mortgage points as prepaid interest to lower your payments, you can often deduct this full amount for the year of purchase. Check with our pros to see if there are any exceptions you fall under here.

PMI deduction: Those who pay less than 20 percent down on a new home may be required to pay a monthly private mortgage insurance premium instead. If this is the case, you can often deduct these amounts on your 1098 form.

Other Financial Perks

Capital gains relief: Your home functions as a long-term investment, meaning it gains value over tie. If you sell after at least two years of living in the home, you likely won’t have to pay any capital gains tax on at least the first $250,000 in profit.

Down payment IRA penalty: You can use up to $10,000 of IRA money toward a down payment without paying any penalty. Know that if it’s a traditional IRA, you’ll still pay this income tax when you withdraw funds.

For more on the financial benefits that come with first-time homeownership, or to learn about any of our mortgage services, speak to the pros at Mortgage Investors Group today.

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