Debbie's Blog

Tax Benefits of Owning a Home

Apr 2, 2008

Before a home owner curses the troubled housing market, he or she should take solace in the U.S. tax code, which makes buying a home a good deal for almost everyone.Here’s why: Mortgage interest deductions, including in some cases mortgage insurance premiums, reduce home owners’ tax liability by reducing income. The deduction includes interest paid on both a first and a second home. Interest on home equity loans is also deductible — whether the borrower uses the money to remodel the kitchen or to take a vacation to Disney World. Profits from selling a house are potentially a huge windfall. When a home owner sells a primary residence, any profit on the sale of the property is tax free up to $250,000 for single home owners and $500,000 for married home owners filing. Any profit above that is nearly always a long-term capital gain taxed at 15 percent — less if the seller’s tax rate is less than 20 percent. Home owners can itemize. That opens up opportunities to deduct a host of other items that wouldn’t be deductible if the taxpayer took the standard deduction. Source: The Boston Globe, Leonard Wiener (03/02/08)

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HUD Releases New FHA, Conforming Loan Limits

Apr 2, 2008

WASHINGTON, March 06, 2008 - The U.S. Department of Housing and Urban Development today published new FHA and conforming loan limits, based on median home prices as mandated by the Economic Stimulus Act signed by President Bush in February. New loan limits for FHA and Fannie Mae and Freddie Mac are now calculated at 125 percent of the HUD published median prices, with a floor of $271,050 and $417,000, respectively, not to exceed $729,750. NAR expects the impact on the housing market to be significant because of the infusion of capital into the mortgage market, which should result in lower interest rates across the board. In addition, there will be a direct impact on high-cost areas that previously required borrowers to take out costlier jumbo mortgages. Read more> NAR's Chart of New FHA and GSE Loan Limits> (PDF: 239K) This is a chart that outlines both the new FHA and GSE Loan Limits for every county in the United States. Please note: To verify the NAR numbers visit the HUD Website: https://entp.hud.gov/idapp/html/hicostlook.cfm Enter your state and/or county and the type of limit you want to find in the drop-down menu called "Limit Type." (FHA, HECM, Freddie Mac/Fannie Mae). Visit the FHA Website> FHA Mortgage Limit Database> This FHA database features an interactive US map, which provides county-by-county loan limits information. OFHEO's Chart of Areas with Higher GSE Conforming Loan Limits> (PDF: 21K) This chart includes just the metropolitan statistical areas, micropolitan statistical areas, and rural counties that now have conforming loan limits above $417,000, organized by state.

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