Contact: MICA (202) 682 2683
Email: pat@micadc.org
Need Another Deduction? Buy Your Own Home!
Typical Home Buyer Could Save $2,558 in Taxes During 1st Year of Homeownership
Washington, DC (March 26, 2001) -- As April 15th approaches, people looking to reduce their taxes might consider one of the best tax breaks around — buying their own home. Homeownership, and the tax advantages associated with it, is now attainable for more Americans than ever before. Part of this expansion of opportunity is due to private mortgage insurance (PrivateMI), which lowers risks for lenders, enabling people to buy homes with very low down payments.Because mortgage interest, state and local property taxes, and home equity loans up to $100,000 are all tax deductible, homeowners see substantial savings at tax time. For someone in a 28 percent federal tax bracket, every dollar they deduct means an additional 28 cents in tax savings.
According to the National Association of Realtors, the national median home price in 2000 was $139,000. Purchasers of a median-price home, with 5% down and a 7% fixed-rate 30-year mortgage, could save $2,558 in their first full year of homeownership by deducting their mortgage interest from their taxes, according to reliable industry estimates.*
"Tax savings are certainly one, but by no means the only advantage of owning your own home," observed Suzanne C. Hutchinson, Executive Vice President of the Mortgage Insurance Companies of America (MICA). "The private mortgage insurance industry is proud of its role in helping people buy their own home sooner, for less money down, and get a tax deduction in the bargain."
Deborah Henderson, a 49-year-old single woman who bought her first home in Silver Spring, Maryland last August with the help of PrivateMI, is a perfect example. Henderson, who now realizes what a tax advantage owning her home has meant to her, wishes she had bought much sooner. "I just couldn't believe how painless and easy PrivateMI made it, for someone who has only wages and no husband. . .to obtain a house," she said. "I wish I had bought a house earlier, because I see the tax benefits now."
MICA is the trade association representing the private mortgage insurance industry. Its members help loan originators and investors make funds available to home buyers with as little as 3-to-5 percent down — and even less for qualified borrowers — by protecting these institutions from a major portion of the financial risk of default.
For more information visit www.privatemi.com.
*Source: derived from Homestore.com online calculator.