Home Ownership Pays PDF Print E-mail

 

house_money
For many Americans, the best way to build wealth is to pay down a mortgage. The multipurpose investment essentially is a 'forced savings account.' The homeowner lives in the house and pays down the mortgage, over time the property appreciates, and eventually it can be sold and potentially net a tidy profit. In the meanwhile, mortgage interest rate and property tax payments are tax deductible.

 

Mortgage payments help build a homeowner’s net worth because a portion of the payment goes toward building equity. The hard-earned equity can be saved for the big sale, or it can be tapped to obtain low interest home equity loans. The lower interest loans can be used for a variety of expenses including college tuition, home improvement or car payments.

 

Mortgage interest rates and property taxes quickly add up and, the combined itemized deductions can result in a hefty tax deduction. In some cases, the amount could elevate the taxpayer beyond the minimum itemized deduction, allowing for even more itemized deductions.

 

Homeownership also can pay tax-wise when it’s time to sell. Through the Capital Gains Tax Exclusion, homeowners qualify for a hefty tax break if they’ve owned and lived in the home for at least two of the five years preceding the sale. Married couples filing jointly and single owners can earn up to $500,000 and $250,000, respectively, in tax-free profit on the sale of their home.

 
Copyright © 2014. Welcome to Marin Sonoma Coast. Designed by Victor Arguelles