The New Year is upon us, and before you know it tax season will be in full swing. If you’ve already begun compiling your paperwork, you’re probably wishing you had more tax deductions for 2014. The good news is, if you don’t currently own a home, now is the perfect time to buy one…and secure a nice tax deduction for 2015.
A recent report by mortgageloan.com predicts that home prices will rise nearly five percent in the coming year, and the low rates of today will vanish by mid-2015. For these reasons, Don Frommeyer, CEO of NAMB—The Association of Mortgage Professionals, argues that 2015 will be the year of the first-time homeowner for several reasons, but it’s wise for them to act quickly.
“Interest rates on mortgages are extremely low,” says Frommeyer. “And they will go up, probably within the next several months. Plus, there are measurable tax benefits for homeowners, so if you think homeownership could be right for you, now is the time to get your ducks in a row.”
According to Frommeyer, understanding available tax deductions takes some work, but it’s worth it for new property owners.
“It’s crucial that borrowers do their homework,” advises Frommeyer. “Deductions may be available on everything from your monthly mortgage payment and loan points to property taxes and, in some cases, even the sale of your home. I recommend sitting down with a tax counselor to make sure you’re maximizing your deductions.”
Frommeyer offers some advice for what those prospective homeowners should do today to prepare for what is likely the biggest purchase of their lives.
“The most important thing to do is become familiar with your FICO score,” advises Frommeyer. “You don’t want any surprises when you sit down with a broker. Then, ask about tax credits for first-time homebuyers, which usually fall at the state or local levels. Finally, consider what your circumstance will be in five to 10 years. Finally, ask about mortgage counseling. You can never be too prepared for the costs associated with homeownership.”
For more information, visit www.namb.org.