Many people, even seasoned real estate professionals, may not realize just how much money they can save by tapping into the right programs or deductions. The fact is that many programs have been created in order to reduce the cost of achieving the home ownership dream. They come in the form of tax breaks, products that reduce mortgage interest rates and programs designed to make first time home buying more accessible.


Savings apply to those who already own a home as well as those considering buying for the first time.
Skim to the section that applies to you.

I’m a US Resident and DO currently own a home.

  • HARP Program: $75,000 Savings (average 30-year loan)The Home Affordable Refinancing Program was introduced as a response to the housing crisis in order to help homeowners afford to stay in their homes. Yet it’s open to any homeowner – you don’t need to be in financial stress to use it.

    According to a study put out by Columbia University, the average homeowner who refinanced with a HARP loan was able to reduce their mortgage rate by a healthy 1.4%, resulting in savings in the first year of $3,500. However, the program is scheduled to end permanently at the close of 2016, so homeowners who have not already looked into it should do so before eligibility expires. See if HARP can lower your rate >>

  • VA Programs: $42,000 Savings (average 30-year loan): If you’re a veteran or current armed services member, there are two programs that can save you considerable amounts of money:
    • You have a conventional mortgage: Because the Federal government guarantees VA loans, their interest rates average about half a point lower than conventional mortgages. In addition, these loans do not require you to pay for mortgage insurance (which conventional loans do if you don’t have more than 20% down). All-in, refinancing into a VA guaranteed loan will save you an average of $42k over a 30 year loan, and will save $3,100 in year 1. See how to transition to a mortgage with VA benefits >>
    • You already have a VA mortgage: One of the most powerful features of a VA mortgage is the possibility of easily reducing your existing rate by making a “Streamline Refinance” or IRRRL. This is a simple process that can be completed without an appraisal and without any out-of-pocket expenses. It’s far simpler than the original loan because you don’t need another Certificate of Eligibility. Effectively it’s a scan for lower rates, and if a lower rate is available, a reduction of your payment to that lower rate. See if an IRRRL can lower your rate >>
  • Comparison Shopping Tools: An Additional $24,000 in savings
    Ok, we have a bit of a vested interest here since we are a comparison-shopping engine (something has to pay the bills!) But research has repeatedly proven that those who see more offers from more competing banks end up with lower rates and better terms. In fact, the most recent “rate spread study” compared the rates received by 20,000 borrowers. Those who saw 3 rate offers saved $11k over the life of their loans compared to those who saw only one. Those who saw 5 offers? A whopping $24k in savings. If you only received a single offer when you either originally took your mortgage or when you last refinanced, you could very well be leaving $24k on the table. So regardless of which of the above programs you apply for, receiving multiple offers when you do will ensure that you get better terms. See if competing offers can help you save >>.
  • Deductions: Up To $100,000 In Savings
    • Interest deductions: $45k in savings. This is the obvious one; pretty much everyone knows you can deduct the interest expense from the first $1 million you borrow against your primary residence. Yet for anyone sitting on the fence deciding if they should rent or buy, actually breaking down the total tax savings can be pretty eye opening.
    • Property Tax Deduction: $43,000 Savings (30-year period). Property taxes are deductible against federal taxes due. Over time this can add up to an amount that is nearly as large as the interest deduction.
    • Simplified Home Office Deduction: Up to $1,500 deduction. If you use your home for business, you may be able to deduct expenses for the business use of your home. In fact, the IRS has recently simplified the process of doing so, allowing those who qualify to deduct $5 per square foot up to 300 square feet (for a maximum deduction in this simplified process of $1,500). Businesses which legitimately incur more than this in expenses can still use the old method instead.
    • Capital Gains Exclusions: If you’re selling your primary home, you can exclude a portion of the profits if you have occupied the home for at least 2 years. A single tax payer can exclude $250k in profits while a married couple can exclude $500k. At 20% federal capital gains rates, the maximum exclusion is worth a cool $100k in tax savings.

* Average value calculated on a $250,000 mortgage, and come from an average rate reduction of .5% (worth $840 annually), and the elimination of PMI (worth $2,292 annually until equity threshold.

I’m a US Resident and DO NOT currently own a home.

  • FHA First Time Buyer: 3.5% down payment requirement
    You can use the FHA program to buy a house with only 3.5% down, even if your credit is far less than perfect. This opens up the possibility of buying a home to so many people who may not currently believe that they would qualify. With interest rates as low as they currently are, it may make far more sense to buy than to continue renting. Think of it this way, to buy a $250k house, you would only need $8,750 for your down payment, and then your mortgage would be in the range of $1,100 a month. Plus, you’d get to deduct the interest when filing your federal taxes. Get qualified for an FHA loan here >>
  • VA Purchase Mortgages: The VA offers powerful home-buying programs including:
    • 0% down payment
      Many people think they can’t buy a home unless they’ve saved tens of thousands of dollars for a down payment. While this may be true for most people, it is not true for qualified veterans. Vets can access this program to buy a home with 0% down. With rates as low as they are now, you’ll likely be surprised at how much house you can afford when buying vs renting. See if you qualify >>
    • Reduced payments and lower interest The Federal government guarantees VA mortgages, allowing approved lenders to offer lower rates. In fact, between the rates that average a little under a half a point less, and the fact that vets do not have to pay private mortgage insurance, VA loan payments on a $250k mortgage average about $3,100 less than a conventional loan. See VA rates >>
  • Mortgage Tax Credit Program (MCC): Savings up to $2,000/year
    Those who have not owned a primary residence for the last 3 years can qualify for this little-known tax credit program. In qualifying states, the MCC program will apply a tax credit directly to your paycheck for as much as $167 per month. This can enable qualifying buyers to increase the amount of house they can afford.

* Average value calculated on a $250,000 mortgage, and come from an average rate reduction of .5% (worth $840 annually), and the elimination of PMI (worth $2,292 annually until equity threshold.

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