Buying A Home Doesn’t Have to be Taxing
REPOST of my April 2011 article
Buying Your First Home Doesn’t Have to be Taxing
by Frederic Din, REALTOR(r), Imperial Valley Real Estate Agent
member of Imperial County Association of REALTORS(r), California Association of REALTORS(r) and National Association of REALTORS(r).
I’m sure you’ve heard the stories from your friends and family members, story after story about how hard, challenging, and ultimately rewarding buying your first home can be, however it doesn’t have to be taxing. As a matter fact, for most would be homeowners, buying a home is going to provide a new tax deduction, far exceeding the standard deduction, however this article is not about taxes and does not provide tax advice. Any reference to tax statutes, deductions and exemptions are talked about for your educational and informational purposes only, you need to consult your tax preparer or CPA before making any tax type decisions.
Earlier this week thousands, if not millions of tax paying Americans filed and paid their Federal and State income taxes including yours truly. Most of these people are self-employed and owe federal and/or state income tax. As an independent contractor, my check doesn’t get nickeled and dime’d by Fed, State, FICA, SDI and a host of other income type tax acronyms regularly associated with a W2 wage earner employees paycheck.
On the other hand owning a home allows you more tax deductions, including but not limited to points and fees you paid when you buy a home, as well as mortgage interest and property taxes, and a few others but make sure you check with your tax preparer or CPA before taking such deductions.
Many first time home buyers I speak to who pay a certain amount in rent also want the same mortgage payment since renters don’t often get much of a tax incentive for being a renter, although there are some perks for renters, they are much smaller and mostly insignificant when compared to being a homeowner.
Over the years I counseled many renters into the financial benefit of being a homeowner and have found the following basics to be true.
1) Home ownership provides a long term and long lasting foundation to wealth building. You see I said long term, not a few years but more than ten years typically to fully see the benefits of owning a home.
2) Home ownership provides a much needed tax haven for most home owners. Yes, there are certain income and tax brackets on both sides of the spectrum that may not see the financial rewards of owning a home versus renting, but for most people it does.
3) Home ownership provides community stability and strengthens neighborhoods, cities, and even counties by providing a stable and solid property tax basis to provide funds for needed infrastructure such as schools, safety, hospitals and a host of other services we take for granted but come from our property tax dollars.
4) Home ownership provides a way to strengthen family and overall is responsible for families coming and staying together.
5) Home ownership provides a means of contributing to the neighborhood through pride of ownership. You know what I mean, those areas of town where all of the lawns are green, well kept, flowers in bloom, the home neatly and nicely painted.
As I’ve talked about in the past and will continue to encourage and talk about is how would be home buyers can educate and prepare themselves for their biggest purchase ever, a home, by following these three simple steps:
A) Make sure you get credit-approved or pre-approved first before looking at homes. This step will review your income and expenses, such as credit cards and car payments to find out exactly home much of a mortgage payment you can handle on a monthly basis.
B) Make sure you have or save some money to go hand-in-hand with your pre-approval. Money is needed for down payment, closing costs and/or home repairs. You can find mortgages that do not require a down payment and you can negotiate a home purchase where the seller pays part of your closing costs, but you will more than likely need to have something put away to make sure.
C) Once you have some money and are pre-approved, find and identify your home buying zone. This is probably where people search too far and too wide, meaning they begin looking at homes in Calexico to Calipatria, however you should narrow down your choices to school districts, work zone, and shopping districts which are important to you. With gas at $4.39 a gallon, driving long distances can be huge cost, so plan accordingly and you will be much better off in the long run.
To learn more about buying your first home, check out my How To video called http://firsthomebuyervideo.com to learn more. Check out areas where you want to live by using our Neighborhood Tour Videos <— by clicking the Neighborhood Tour link.
How can I help you? Feel free to visit and post comments regarding the website and stay tuned for upcoming changes to the look and feel of ImperialValleyREO.com
Are you in the market to buy a home? Get personalized information for any area in the Imperial Valley, including El Centro, Brawley, Calexico, Imperial, Heber and surrounding cities by going to ForSaleByFred.com, ImperialValleyREO.com, or First Time Home Buyer Video
Imperial County and Imperial Valley homeowners who are considering selling their home are encouraged to contact Frederic Din, REALTOR(R) for additional information about getting the most current market values for your home or area. Member of the Imperial County Association of REALTORS (ICAOR).
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