Buy vs. Rent
Trends in home prices, personal income and mortgage rates, combined with the tax advantages of home ownership, make
this an excellent time to turn the home of your dreams into a reality. If you’re thinking of buying a home, you’ve probably
already asked yourself, “Can I afford to buy?” Another good question to ask is, “Can I afford to continue renting?” No matter
what you’re currently paying for rent, your total cash outlay over a period of several years will probably be more than you realize.
When you’re figuring out how much you can afford to commit to monthly mortgage payments, don’t forget the tax advantages of home ownership. Both property taxes and interest payments on a mortgage for an owner-occupied home are currently
tax-deductible. In the early years of a typical mortgage, all but a small percentage of each monthly payment is used to pay off the interest on the loan.
This means that as a homeowner, your annual taxable income could be substantially reduced by deducting the payments you make on property taxes and yearly mortgage interest. Ask your CPA, attorney or tax preparer how
buying a home now would affect your tax situation at the next filing deadline on April 15th.
In addition to tax advantages, you can also benefit from any increase in the value of your home both through appreciation
and improvements you add for your own comfort and enjoyment.