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Home Buying Success: What You Need to Know About Short-SalesJuly 11, 2008
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Buying a home has become harder to do as lending guidelines have become stricter. If you are a veteran, you may find you have the best chance of all in becoming a home owner. How to Save Money and Close Your Home Loan on Time
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Underwriting guidelines have tightened and lenders are taking longer to approve home loans. What can you do to close your escrow on time? Owning a Home Equals Big Tax Savings
By Sheryl LandrumHome Worth Columnist
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A homeowner may get better tax benefits than you think.
Tax Savings Begin with Home Buying
Tax savings begin with deductions allowed for:- Closing Costs -- including "points" to buy down the interest rate. Points are generally one percent of the home loan amount. If your home loan amount is $450,000 and you pay one point, $4,500, this point is a tax deduction amortized over the length of your home mortgage loan.
- Prepaid interest on prorated loan payments between the closing date and your first home mortgage payment.
- Property taxes on the new home purchase.
Tax Savings Continue With Home Ownership
Your home provides shelter for both you and your taxes.- Your home mortgage interest is tax deductible -- so are your property taxes.
- If you have a qualified home office you may deduct a portion of your home expenses.
- Home casualty losses not covered by insurance can be deductible.
- Health-related additions that do not add to a home's value are deductible if prescribed by your doctor.
Tax Savings End With Home Selling
When you sell your home the savings continue.- Capital gains realized on your home sale are deductible ($500,000 for married couples, $250,000 for single and/or married couples filing separately).
- If your gains are higher than the allotted limit, you can deduct home improvements, closing costs, lender fees, and other items from your net home sales price.
- Any prepayment penalties due to your lender can be deducted.
- Some moving expenses may also be deductible.
About the Author
Sheryl Landrum is a Senior Loan Officer with First Capital Mortgage of San Diego at the Prudential Realty Office in Bonsall, California.