Refinancing Home Mortgage
In: Mortgage Payment
21 Mar 2010I purchased a home in December of 2006. My first mortgage payment was not paid until February of 2007. Is there anything that is tax deductible in regards to my home for this year? Also, I put down x amount of dollars as well – what about the money I put down? Do I get anything back for that? Please help!
This is about mortgage information questions.
4 Responses to I purchased a house at the end of 2006 but did not make a mortgage payment until 2007. What can I write off?
Janet P
March 21st, 2010 at 9:07 am
You can’t claim your downpayment.
You can claim the closing costs and points, if you paid them up front.
Amanda H
March 21st, 2010 at 9:35 am
You don’t get anything back for a down payment. You do save LOTS of money on interest this way, but not on taxes. (Interest in a mortgage is deductible– you dont get it back dollar for dollar, you just lower your taxable income. So you’re still better off paying down your mortgage.)
Get out your settlement statement. There are a few things that are deductible:
1) Prepaid Interest (You would have paid interest for each day from closing to the end of December– so if you closed on December 16th, you have about 14 days of prepaid interest.)
2) Prepaid taxes- Your bank probably collected 2-5 months worth of property taxes to start up your escrow fund. (Assuming you are having taxes & insurance included in yoru monthly payment.)
3) Discount points– these are considered “prepaid interest” and are also deductible.
You may find that you dont have enough deductions to exceed the standard deduction, and so itemizing isn’t worth it this year.
John L
March 21st, 2010 at 9:37 am
If you purchased a home in 12/06 then you can deduct the “prepaid interest” paid at closing” and any points paid (origination fee or discount fees)
You may be able to deduct property taxes only if the prepaid taxes you paid were paid to the town (not the lender’s escrow) in 12/06.
Your down payment doesn’t come back to you. It lowers your loan balance only.
Now an idea you may want to consider is to visit http://www.irs.gov and play with their withholding calculator. It will ask you loan info etc. You may be able to adjust your current withholding so that you can receive more in your paycheck each week, month etc.
Closing costs ARE NOT deductible
Visit my blog http://mortgagecounselor.blogspot.com or my website http://www.johnleblanconline for more information regarding this topic.
Skip
March 21st, 2010 at 10:21 am
You may deduct any prepaid interest and taxes paid by you.
You may also deduct any fees and points paid by you for any loans. There is a formula for this you will need a tax program if you do not have a tax preparer doing your taxes.
What ever you do keep copies of your HUD-1 with your taxes.
Your down payment simply lowered the amount you had to borrow therefore no deductions for that.
I hope this has been of some use to you, good luck.
“FIGHT ON”