Finding Home Loans When You Have Bad Credit
By Attila Jancsina
Just because you have bad credit does not mean you can not find a home loan that is perfect for you. The best place to start is online. You can find several lenders online that can help you purchase Read more...
Top 10 Home Software Programs in 2006
By Dina Fedorova
Word processing and spreadsheets were the first of the killer apps for home computers when PCs first started to propagate to the millions of households out there. Then, there were Internet Browsers Read more...
How To Avoid Home Business Scams
By Thomas Childs
Avoiding Home Business ScamsHow many times have you heard about a great home business opportunity? Probably more than you care to remember. But to go along with this how many of Read more...
Home Buyers Boot Camp real estate listings buyers guides - your comprehensive az real estate resource.
Below, you'll find extensive information
on leading az real estate articles and products to help you on your
way to success.
Why Uncle Sam Wants You ...To Purchase a Home!
By Nef Cortez
One of the best tax breaks that the United States Tax Code allows for is the deduction of mortgage interest and property taxes paid on one=s personal primary residence. Over 66% of Americans enjoy the benefits of this tax break. The purchase of a for the purpose of occupying it can mean thousands of dollars in tax savings for the first time buyer.
For example, the Median Household Income for Diamond Bar and Walnut, California a neighboring community) residents’ is slightly over $100,000.00 per year. Assume that a homebuyer purchases a typical in the area with a purchase price of $600,000, and finances the purchase with an 80% conventional 30 year fixed rate loan with a rate of 6.25%. Also assume that the new homeowner falls into the 25% tax bracket. The new homeowner will have an annual tax deduction of mortgage interest of approximately $30,000 per year, and a property tax deduction of $7,500 per year! The new homeowner would have an approximate tax savings of $9,375 for the year. This factor alone makes owning your own extremely desirable.
In addition to the above mentioned annual tax break, there is also a little known tax break available to the homeowner when you decide to sell your home. Depending on your circumstances, you'll be able to avoid some taxes on the profit you make.
Years ago, to avoid paying tax on the sale of a residence a homeowner had to use the sale proceeds to buy another house. In 1997, the law was changed so that up to $250,000 in sales gain or profit ($500,000 for married joint filers) is tax free as long as the homeowner owned the property for two years and lived in it for two of the five years before the sale. Please note this important stipulation, it is worth repeating, you can not qualify for the $250,000 tax free gain ($500,000 for married joint filers) unless you have lived
in the property for two of the five years that you have owned the home.
If you sell before meeting the ownership and residency requirements, you will owe tax on any profit you make. The IRS provides some tax relief if the sale is because of a change in the owner's health, employment or unforeseen circumstances. In these cases, the tax-free gain amount is prorated.
And a ruling by the IRS in late 2002 could put more dollars in homeowners' pockets when they must sell before they qualify for the full tax break. The Treasury has defined the unforeseen circumstances that often force homeowners to sell and under which they now can get some tax relief. They include:
Divorce or legal separation,
Job loss that qualifies for unemployment compensation,
Employment changes that make it difficult for the homeowner to meet mortgage and basic living expenses, and
Multiple births from the same pregnancy.
Obviously, while both of these examples are over-simplified, as most people=s individual tax circumstances can vary substantially, they are solely used to illustrate how homeownership can be a great tax savings tool during the time period that you own your and when you sell. The best person to advise you on tax matters is a licensed certified public accountant. I recommend that you contact your tax professional for tax advice before you buy, it might make all the difference in determining which house you make an offer on!
Furthermore, although not tax related, owning your own especially in the last few year=s appreciating real estate market, has contributed to many homeowners finding that the value of their equity has doubled or tripled during this time period. The 2000 U. S. Census Report on Net Worth and Asset Ownership of Households has determined that approximately 70% of the average American=s net worth at retirement age is comprised of the value of their equity. While this rate of appreciation has definitely cooled down in many real estate markets in recent months, in others it still has shown a healthy appreciation rate. Your best way of finding this information is by speaking to a professional realtor who can advise you on your local real estate market.
Considering all the above factors, it is no wonder that it is no wonder that the U.S. Government wants you to own your own home.
for more information visit http://www.nefcortez.com
Nef Cortez has been a licensed real estate broker and has held various positions in the real estate industry for over 25+ years. Visit his website at Chino Hills Homes for information on foreclosures.