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In general, your monthly payment will include:
- Mortgage loan principal
- Mortgage loan interest
- Real estate taxes (via escrow account)
- Homeowner's insurance (via escrow account)
One advantage of homeownership is the tax deductibility of mortgage interest and real property taxes. Your mortgage interest deduction is highest in the early years of the loan term when most of your payment is applied to interest.
To estimate yearly tax savings, multiply your total annual mortgage interest expense by your personal tax rate. For example, if you paid $10,000 in interest in 2007 and your personal tax rate is 31%, you would save $3,100 in federal income taxes by deducting the mortgage interest expense from your taxable income.
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All information collected at this Web site will be used for financial planning purposes only. Calculators are for demonstrative purposes only. This information is provided to help educate users on financial topics, but should not be considered as their sole source for financial decisions or financial advice. This information is from sources we believe to be reliable but cannot guarantee its accuracy.
myVizer.com copyright© 2008 The Advisory Firm, LLC
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