All signs are showing now is a great time to purchase real estate. It is important to understand tempting tax breaks may expire at the end of the year. Since there is no indication these will be extended, now can be considered the “Black Friday” of home buying. Luckily, to take advantage of the situation, you will not need to stand in endless lines or battle crowds of people.
According to tax experts, select breaks may be continue, but nothing is certain. Also, the country was lucky when the Federal Reserve recently decided against raising interest rates.
Take Advantage of Certain Breaks
If you do not have enough savings for a 20 percent down payment, you will need to purchase private mortgage insurance. However, the government has been known to offer some discounts to PMI holders. This insurance is tax deductible as well.
If you are interested in purchasing a home that requires certain upgrades, you can take advantage of energy tax credits. For example, installing new windows can earn you a credit for 10 percent of the purchase price. Installing larger energy-savings systems may earn you a 30 percent credit toward the cost.
Buy Points for a Lower Interest Rate
Today, one of the most attractive tax advantages is the chance to buy points for a lower rate of interest. You can deduct the interest and cost of the points in the year you purchase your real estate.
No one can predict the future, but if you are on the fence about purchasing a home, it is best not to wait. Even if certain tax breaks are extended, you will still reap the benefits of buying now.