Buying your first home
In buying a home, you have made what may well prove to be the largest financial transaction of your lifetime. The purpose of this article is to help the first time homebuyer in achieving this goal with the fewest mistakes possible.
To begin, here are a few “pointers” as well as questions often asked when contemplating the purchase of your first home.
1. Is it a buyer’s market or a seller’s market?
Guess what? A once in a lifetime opportunity has presented itself to the first time home buyer. A buyer’s market prevails among us. Now is the time to seriously consider the possibility of buying your home. Prices may vary due to location as well as a seller’s desperation to sell. Obviously, if a house has been on the market for quite some time, the seller may be willing to negotiate a more favorable purchase price with the purchaser in order to unload his home and move on.
2. Are there tax benefits involved in owning a home? What are they?
Potential buyers often become nervous over whether or not a purchase of a home will stretch their income too thin. Not to fear! What people tend to forget is that mortgage interest and real estate taxes are deductible items on both federal and state income tax returns. Discount fees or points paid to a mortgage lender may also be deductible at specific times. In calculating the dollar benefits from tax deductions (mortgage interest, real estate taxes and points, etc...), consult your accountant.
Your accountant can recalculate your most recent tax return figuring in all the deductions you would be entitled to if you owned the house in question. After calculating your tax savings, divide that number by 52. The result will be the amount of money you could add to your weekly budget. Obviously, the effects cannot be immediately felt at closing, but in the long run, the new homeowner will end up with “new found” spendable income at "tax time" or said savings can be spread out over the entire year.
Koehler & Isaacs LLP is a full service law firm located in New York NY. We offer our clients a range of legal services throughout New York including Westchester, Ulster, Rockland, Dutchess, and Nassau Counties.