Tax Benefits for First Time Home Buyers
Tax-Free IRA Withdrawals for Down Payment
The biggest hurdle in Mesquite for most first-time home buyers is that big down payment, often as much as 20 percent or more. But you may not have to save all that down payment with the tax breaks in place.
Mortgage Interest Deduction
The deduction of mortgage interest was one of the most important tax breaks for homeowners, especially for home buyers for the first time. The new tax laws have lowered the amount of loan for which interest deductions can be taken, but the $ 750,000 limit will not affect home buyers most of the time.
For first-time buyers, this deduction is important because the interest portion of monthly mortgage payments in the early years of repayment is so much more. For the first time home buyers in Mesquite to take advantage of this tax benefit, you will need to specify deductions in Schedule A. Furthermore, these deductions must be greater than the new standard deduction.
Deduction for Mortgage Points
The deduction for mortgage points is a related tax benefit for first-time home buyers in Mesquite. Basically, these mortgage points are the prepaid interest that helps borrowers qualify over the life of the loan for lower rates. And, many times, through qualifying for a tax deduction, which is often overlooked by home buyers, mortgage points can do double duty.
Tax accountants argue that these points are one of the best tax breaks going on because they provide a double investment return. The cost of the points as well as the interest paid in the home purchase year can be deducted. But, again, in order to take advantage of this benefit, you will have to itemize.
For the first time home buyers in Mesquite , there are still some significant and significant tax benefits. You’ll want to consult your tax professional to take advantage of as many as possible. But don’t forget to call your local real estate agent’s expertise.