Homeowner's Tax Benefits
- Purchasing a home can provide valuable tax savings
to homebuyers. Mortgage interest, property tax, and other payments associated
with financing a home can apply to your tax deductions. They may decrease the
amount of income tax you must pay to the federal government.
- Another financial advantage to owning a home is that as you begin to pay
off your mortgage loan, you build equity in your
property. In other words, the value of your home can increase as your total
mortgage amount decreases over time.
- For those who rent, the tax savings of ownership go to the landlord, not
to the tenants. Wouldn't you rather build equity for yourself every month
instead of paying someone else and giving away "your" tax savings?
tax savings
The deduction a taxpayer can take on their tax form for interest paid on a
home mortgage. The amount of money that the homeowner is not required to pay the
government in taxes because he or she owns a home.
taxes
As a part of PITI, the amount of the monthly mortgage payment which
does not include the principal, interest, and insurance.
equity
The value of a property beyond any liens against it.
Also referred to as owner's interest.
lien
A claim against a property for the payment of a debt. A mortgage is a lien;
other types of liens a property might have include a tax lien for overdue taxes
or a mechanic's lien for unpaid debt to a subcontractor.