Loni Lueke REALTOR® - The Do's and Don'ts in your Homebuying Process

CHAPTER 2 Being a Homeowner cost a lot of wner cost a lot of money - doesn't it?

Owning a house brings a whole new experience into your financial plans. For example, consider taxes and mortgages. When you purchase a home, it’s important to understand what can be deducted and what can’t. A powerful piece of information many homebuyers overlook is the effect of mortgage interest on their federal income tax payments. Mortgage interest is deductible and a powerful financial planning tool. Calculate the amount of mortgage interest deduction and include that in your annual financial planning. Then, make a point of checking the Internal Revenue Service (IRS) Form 1098 from the lender at the end of the year. This form shows the amount of mortgage interest that you’ve paid. Some of the nondeductible items include home repairs, general closing charges, homeowners’ association dues, as well as property hazard insurance premiums.

ADVANTAGES OF BEING A HOMEOWNER

Control over housing expenses. By selecting a fixed-rate 15-, 20-, or 30-year mortgage, the homeowner has the assurance that housing costs will not increase over the period, and, in fact, will be eliminated at the end of the term (subject to refinancing). You build equity. Some of each monthly mortgage payment goes toward the loan’s interest. Other portions may go to homeowner’s insurance and