This is an important FAQ! Most first-time home buyers don't understand how powerful the tax deductions can be from owning vs. renting. We'll try to clarify that here.
The very first thing you should do is read this article that explains the differences between buying & renting.
Now that you have the basics, here's the important thing to remember (quoted from the article above):
I'm hesitant to formulate a "rule of thumb" as a tool to help folks determine their deductions. There are too many variables that can greatly change the amount of mortgage interest you pay in a given year. However, perhaps it's safe to say that you can take 20 percent off your mortgage payment to get a rough idea of the tax benefits.
Using the 20% discount as a guide, if you have a $2,000/month payment, you can reasonably assume that the after-tax payment will be more like $1,600.
Here's another way to look at it: Your payment will still be $2,000/month but your take-home pay will go up by $400/month because you'll be paying less in taxes.
If you want to better understand how all this works, submit an inquiry at right and we'll review your specific situation with one of our trusted loan officers.
And please remember, this FAQ is not intended to be tax advice! Please consult a tax professional to discuss your specific situation.