Current Mortgage Rates
Saturday, November 07, 2009
When buying a home there are many tax benefits you can take advantage of, including a mortgage tax deduction. Besides a real estate deduction, a mortgage tax deduction can be a great benefit. The only main qualifier for the tax deduction is that the amount, including for the primary and any second residence is less than $1.1 million.
Here are a few homeowner tax deductions to consider. Not everyone can take all of these deductions, so please be sure to always check with a tax professional.
* Mortgage Interest: The interest you're paying on the loan(s) for your home may be tax-deductible, no matter what the interest rate. Mortgage interest is one of the best tax deductions, and some homeowners don't even know about it. The interest you deduct may be on a loan secured by your first or second home. Your deduction may be limited if all mortgages on your home total either more than the fair market value of your home, or more than $1 million ($500,000 if you're married and filing separately from your spouse); or if your home equity loans total more than $100,000 ($50,000 if you're married and filing separately).
* Points Paid on a Refinanced Loan: If you refinanced, you may be able to write off the points you paid to get a lower rate on the new loan. Points paid on a refinance are deducted proportionately over the life of your loan. For example, if your new loan has a 15-year term, you'll deduct 1/15th of your points each year. If you've refinanced before, and you have points from the previous refinance that haven't yet been deducted, you can write off the rest of those points in the year you refinance.
Unfortunately, not all expenses related to home ownership are tax-deductible. These include:
Here are a few homeowner tax deductions to consider. Not everyone can take all of these deductions, so please be sure to always check with a tax professional.
* Mortgage Interest: The interest you're paying on the loan(s) for your home may be tax-deductible, no matter what the interest rate. Mortgage interest is one of the best tax deductions, and some homeowners don't even know about it. The interest you deduct may be on a loan secured by your first or second home. Your deduction may be limited if all mortgages on your home total either more than the fair market value of your home, or more than $1 million ($500,000 if you're married and filing separately from your spouse); or if your home equity loans total more than $100,000 ($50,000 if you're married and filing separately).
* Points Paid on a Refinanced Loan: If you refinanced, you may be able to write off the points you paid to get a lower rate on the new loan. Points paid on a refinance are deducted proportionately over the life of your loan. For example, if your new loan has a 15-year term, you'll deduct 1/15th of your points each year. If you've refinanced before, and you have points from the previous refinance that haven't yet been deducted, you can write off the rest of those points in the year you refinance.
Unfortunately, not all expenses related to home ownership are tax-deductible. These include:
- Homeowners insurance premiums
- Depreciation
- Cost of utilities
- Settlement or closing costs
- Wages for domestic help
Make sure to keep complete records about your property and expenses related to improvements. Keep these records until the period of limitations runs out - generally three years. Some items should be kept for as long as you own the property and then after you sell it, for as long as the period of limitations applies.
For more details about what is and isn't deductible in terms of home loan interest - including exceptions for particular cases - read the IRS Publication 530, Tax Information for First-Time Homeowners, and Publication 936, Home Mortgage Interest Deduction. You should also consult your tax advisor about your situation. Selling your home and moving may have tax implications for you, as well. To find out more, read the Internal Revenue Service Publications 523, Selling Your Home, and 521, Moving Expenses.
For more details about what is and isn't deductible in terms of home loan interest - including exceptions for particular cases - read the IRS Publication 530, Tax Information for First-Time Homeowners, and Publication 936, Home Mortgage Interest Deduction. You should also consult your tax advisor about your situation. Selling your home and moving may have tax implications for you, as well. To find out more, read the Internal Revenue Service Publications 523, Selling Your Home, and 521, Moving Expenses.
More Mortgage Resources
Mortgage's Tax ImplicationsWhat are the tax benefits associated with different types of Loans?
Should I Borrow For the Tax Deduction?
How to maximize your Tax Deductibles?
Get Current Mortgage Rates
From Top Lenders
Mortgage Resources
- Adjustable Rate Mortgages
- Bad Credit Mortgages
- Bankruptcy
- Better Money Management
- Buying a House
- Credit Card Debt
- Debt Consolidation
- Debt Negotiation
- Home Equity Loan
- Interest Rates
- Locking the Rates
- Managing the Mortgage
- Mortgage Application
- Mortgage Calculators
- Mortgage Insurances
- Mortgage Payments
- Mortgage Qualification
- Mortgage Taxes
- Refinancing
- Second Mortgage
- Selecting a Loan Provider
- Selecting the Mortgage Features
- Selecting the Mortgage Type
- Shopping for a Mortgage
- Tips and Advice
- Current Mortgage Rates by State
Current Mortgage Rates*
Loan Type National Average |
|
| 30-yr. fixed | 4.99% |
| 30-yr. fixed jumbo | 5.62% |
| 15-yr. fixed | 4.38% |
| 15-yr. fixed jumbo | 5.25% |
| 7/1 ARM | 4.25% |
| 5/1 ARM | 4.12% |
| 3/1 ARM | 4.25% |
| 1-yr. ARM | 3.75% |
| 1-yr. LIBOR ARM | 4.38% |
| 10/1 ARM | 5.00% |
*Mortgage Rates Updated: 11/06/2009