These excellent tips about the surprising but true costs of renting versus buying a home are brought to us today by guest blogger Sumer Lopes of Summit Funding in Elk Grove. What does it really
Surprising Reasons Why Renting Costs You More
These excellent tips about the surprising but true costs of renting versus buying a home are brought to us today by guest blogger Sumer Lopes of Summit Funding in Elk Grove.
What does it really cost to rent?
Thinking about the cost of living in many communities these days is astonishing, especially if you're a renter and not a homeowner. If you are currently paying $1,500 a month for a home that you rent, then over the next three years, your landlord will effectively have pocketed $54,000 of your hard earned money! You're paying their mortgage when you could be building equity in your own property.
What if I don't have the money saved up to buy a home right now?
There are loan programs available that offer low and no down payment options. Some programs allow gift money as a down payment, and in some cases sellers are willing to make a contribution to your closing costs if they want to sell the home quickly. In many counties, government grants or Down Payment Assistance programs can get you into a home for equal to or less than many rental properties require up front for security deposit and first month's rent.
There are several financial benefits to owning a home, and a big one is tax deductions. Here's how this can benefit you as a homeowner:
How much of my home costs are tax-deductible?
These rules are outlined by the IRS, and tax deductions do vary. The IRS provides several tax publications that outline the specifics of how homeowners can take deductions on their tax bill. The publications to check out include: Publication 530- Tax Information for First-Time Homeowners and Publication 936- Home Mortgage Interest Deduction. For quick reference, you can also refer to Tax Topics 505- Interest Expense, and 504- Home Mortgage Points.
State and local guidelines may be referenced in these publications and the best recommendation is to consult a CPA to answer questions that you have after reading the tax publications provided by the IRS.
Many other taxes and costs are also tax deductible:
Real Estate taxes are deductible on a primary residence.
Mortgage interest is deductible on a loan to purchase, build or improve your home.
Pre-paid interest is deductible in the year it is paid.
Construction loan interest payments are deductible.
This is by no means a complete list of deductions you can take, and it is always best to consult your CPA or tax advisor
Call Sumer Lopes at 916-691-5301 to discuss your specific needs and she'll find the program that's right for you. She has a variety of low down payment and no down payment programs available.
We hope this information is helpful in understanding some of the important steps for buying a home, but of course if you do have any questions please don't hesitate to ask. We are here to make this as smooth and efficient a process as possible.
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