You’ve heard it before; Your home is probably the biggest investment you’ll ever make. It may also be the biggest tax write-off you’ll ever have.
Home related tax deductions from mortgage interest to real estate taxes can add up. If you’re married filing jointly with taxable income of $100,00, an extra $5000 in deductions would lower your tax liability approximately $1250 depending on your tax bracket.
To qualify for the mortgage interest deduction, the loan must be secured by a qualified home, and you must itemize your tax return. “Points” and certain fees paid to the lender to obtain a home loan may also be deductible. Mortgage insurance premiums you pay on loans issued after 2006 can also be deducted, though income limits apply.
Another of way of looking at this, depending on your mortgage loan amount, your total monthly mortgage payment may actually be $100 to $250 or more less after taking the tax advantages of home ownership into consideration.