that should not be overlooked in your home-buying journey. • Complete all application forms accurately: Attention to detail is key. Ensure that all necessary documents are prepared and submitted as required. The HUD website is a valuable resource for comprehensive information: HUD Home Buyers.
OTHER HOMEOWNER TAX BREAKS: REAKS:
• The Mortgage Interest Deduction. This is one of the most beneficial tax breaks that home buyers can take advantage of, whether first-time or otherwise. The IRS allows you to deduct the interest you pay your lender from your taxable income. Home mortgage interest is one of the most significant deductions for itemizing. Lenders will report your mortgage interest on a 1098 form sent out annually. The Mortgage Interest Deduction (MID) is valid for mortgage debt up to $750,000 or mortgage debt up to $375,000 if you are married but filing separately. Home buyers can benefit significantly in the first years after buying, as the first repayments have the highest interest. Home buyers must file an itemized tax return to claim the MID benefit. • Mortgage Points. Discount points (mortgage points) are fees paid directly to the lender at closing in exchange for a reduced interest rate. The discount points cost equals 1% of your mortgage ($1,000 for every $100,000). Discount points involve prepaid interest and can reduce your total mortgage payment. The interest rate on your mortgage typically lowers by 0.25% with each point you buy. If you
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