Some first time home buyers who can't afford to put 20% down worry about Private Mortgage Insurance. PMI, like ordinary interest paid on a home mortgage is tax deductible for many home buyers. Considering that most of your monthly payment in the first year's of your home loan, the amount of interest you pay each year can really add up.
Besides the pride of ownership and not having to worry about "the rent going up," home ownership has its advantages. At tax time home owners smile that the biggest costs of home ownership - interest and taxes - are deductible according to today's tax guidelines.
So at the end of the year the home owner has deductions that significantly offset what they have paid in monthly payments.
Of course everyone's situation is different so its important to check with your tax advisor.
Perhaps the bigger worry for buyers paying PMI is the amount of their payment. After all, paying an extra $200-$300 per month on top of the regular payment may be a big hit to the budget. The cost of saving up for a bigger down payment may m ean home prices rise beyond what you can afford.
Your best bet is to meet with a lender to find out how much home you can afford. A mortgage expert will explain your options so you can decide what is best for you.
If you are ready to make the move from renter to home owner and need references for a good lender, contact me so we can help.
No comments:
Post a Comment