Write – Offs to Remember!
Deductions in the Loan Process!
Write-Offs! They’re the government’s way of
rewarding you when
you’ve done something they like! And, to judge by
the write-offs,
the government likes it when you borrow money to buy a
house!
There are write-offs aplenty, many of which people often
forget.
Make the most of it! Take every break the IRS says you’ve
got
coming. Here are a few deductions that people often forget:
Loan Fees (aka
Points). If you are paying points, there is good
news!
They’re deductible! They are a total write-off.
Whether you are buying
a new home or refinancing the one you already own, or
just borrowing to
do some home improvement, you can take your “points” right
off the top.
Score one for the borrower!
Pre-Payment Penalties: Just
when you were doing so well, and have
managed to pay that loan off early, they slap you. Remember
you may
have a pre-payment penalty on your mortgage. Ouch! Well,
if it’s any
consolation, you can itemize that away! That will ease
your pain.
Pro-Rated Real
Estate Taxes: Even if the seller was the one
who sent
the municipality the check, chances are you paid a pro-rated
portion of the
taxes for the year at closing. Be sure to take the deduction
for your fair share!
Pre-Paid Interest
(Pro-Rated Mortgage Interest): Depending on when
in the month you closed on your home, you paid either
a significant or very
small amount of Pre-Rated or Pre-Paid Interest for that
month. Big or small,
it is tax-deductible! The final closing statement (HUD
Statement) will show
you that exact amount, listed under the line item “Pre-Paid” Interest.
Additionally,
the lender will send you a form at year-end, showing your
total interest-paid
deduction for the year.
Home Construction
Loan Interest: As
long as the construction period does
not last more than 2 (two) years before you make the new
place your principle
residence, you can write-off the interest for that construction
loan. And really,
if it takes more than 2 years, you most likely got bigger
problems!
It pays to pay attention! All these write-offs can add
up to some serious savings
at tax time!
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