Tax Savings

The government is basically subsidizing the purchase of your home with income tax deductions. 100% of the interest and property taxes in a given year can be deducted from your gross income. For example; assume your initial loan balance is $150,000 with an interest rate of 8% percent, during the first year you would pay $9,969.27 in interest. If your first payment is January 1st, your taxable income would be almost $10,000 less – due to the IRS interest rate deduction.

Property taxes are deductible, too. Whatever property taxes you pay in a given year may also be deducted from your gross income, lowering your tax obligation.

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