Home Buying Advice - Income Tax Relief

Income Tax Relief

Any mortgage interest (including home equity loan interest) and property taxes that you pay can be deducted from your total taxable income. This means that the U.S. government is basically subsidizing your home purchase.

For example, if your mortgage loan amount was $75,000, and the current interest rate is eight percent. In the first year you would pay approximately $4984.63 in interest. Assuming your first payment was on January 1st, your taxable income (the amount of earnings on which you pay tax) would be almost $5,000 less for that tax year.