requirements of that grant program. Finally, find an approved lender and fill out all the application forms correctly. The HUD website is a great resource for buying a home, whether it’s your first or your tenth! (https://hud.gov)
SPECIFIC HOMEOWNER TAX BREAKS
Penalty-free IRA withdrawals. First-time home buyers are eligible to withdraw $10,000 during their lifetime from their Individual Retirement Accounts (IRAs) without paying the 10% penalty for withdrawal before the age of 59 ½, assuming certain requirements are met — mainly that the money must be used to buy or build a primary residence. Mortgage interest deduction. This is one of the most beneficial tax breaks that home buyers can take advantage of, both first- time and repeat buyers. Basically, the IRS allows you to deduct from your taxable income the interest you pay your lender. Home mortgage interest is one of the largest deductions for those who itemize their tax returns. Lenders will report your mortgage interest on a 1098 form sent out annually. Mortgage points. Discount points, or mortgage points, are fees paid directly to the lender at closing in exchange for a reduced interest rate. The cost of discount points is equivalent to 1% of your mortgage (e.g., $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. Mortgage Credit Certification (MCC). This IRS-based program is aimed at helping lower-income individuals, couples, and families afford their first home by essentially subsidizing the loan. The MCC program is designed to help first-time home buyers offset a portion of their mortgage interest on a new mortgage
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