Your Home Mortgage Offers Some Tax Benefits
While a home mortgage may not exactly be an investment, it can have certain benefits. Indeed, most people cite the home mortgage for some of its tax benefits, many of them deriving from deductions related to interest. Here are some of the tax benefits that come with a home mortgage:
- Interest paid. When you make mortgage payments, a large portion of that each month goes to interest, especially at the beginning of the home loan. You can deduct a portion of that mortgage interest on your tax form.
- Mortgage points. Sometimes, you can pay points to get a reduction in the interest rate that you pay. In addition to mortgage interest being tax deductible, you can get some tax advantage for points.
- Home improvement. When you take out a home equity loan, for home improvement or otherwise, you are getting a second mortgage. This can mean that the loans you take out to improve your home, as long as they are based on the equity in your home, may be tax deductible.
- Mortgage tax credit. In addition to home mortgage tax deductions, there is a mortgage tax credit that you can use in some cases.
Before taking any of these tax benefits from your home mortgage, however, it might be a good idea to check the IRS Web site to ensure that you do things properly. You may also consult with a knowledgeable tax attorney or accountant.
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second mortgage, mortgage interest, mortgage blog
