Tax Advantages of Buying a Home

For many people, purchasing a home, or homes, is the single largest investment they will make in their lifetime.  It is a decision that will affect their finances, lifestyle, and family for years to come.  Because of this impact, it is important to consider all aspects of home buying, along with the pros and cons of the choices that are being made. Aside from the actual home buying process, a question most homeowners have is: “What are the tax advantages of buying a home?”


When considering a home purchase, one very big pro is the favorable tax JS Realty Mortgage Tax Advantagestreatment you are able to take advantage of on your individual tax return.  Deducting mortgage interest and real estate taxes is often what makes it more beneficial for taxpayers to itemize their deductions (rather than using the standard deduction); along with state income taxes paid.  This makes itemizing more advantageous. These deductions reduce taxable income, which in turn, reduces taxes due. Typically, personal interest, such as credit card or car loan interest paid is not deductible, but qualified residence interest (with a few restrictions) is fully deductible.

You can deduct the interest paid if you meet the following criteria:

–Your home is your principal residence (meaning that’s where you spend the majority of your time)
–The loan is $1 million or less, and secured by your home
–The loan proceeds were used to acquire the home, or were used to substantially improve your home

JS Realty lender man mortgage contractYou can also deduct the interest on a second home mortgage (such as a vacation or mountain home), as long as the second home mortgage amount, when combined with the principal residence mortgage, does not exceed a combined total loan amount of $1,000,000.  For example, if your principal residence mortgage equaled $700,000, and you purchased a second home with a mortgage of $600,000, you would be able to deduct the interest on your $700,000 principal residence mortgage and you would be able to deduct the interest on $300,000 of your second home mortgage ($1,000,000 – $700,000) for a total interest deduction on $1,000,000 of your mortgage balances.

JS Realty Mortgage Tax AdvantagesThe interest on home equity loan debt is also deductible.  The home equity loan interest deduction is the interest on a loan amount that is the lesser of the loan balance, up to a $100,000 loan, or the fair market value of the home minus acquisition indebtedness.  This interest is deductible for regular tax purposes, no matter the use for the money.  If the loan is not used to acquire the property or make substantial improvements to the property, then careful consideration should be made before securing consumer debt with your home.  If it is the right option for you, home equity loan debt can be used to purchase a new car, a vacation, a hot tub, consolidate credit card balances — whatever your heart desires.  The interest will be deductible for regular tax purposes, however the amounts are not deductible when calculating alternative minimum tax (AMT) .  The ability to deduct home equity loan debt interest allows individuals to effectively exceed the $1 million loan limit by an additional $100,000, thus making the interest on combined home-secured loans up to $1.1 million, deductible.

The table below illustrates how various income levels and age groups would likely be affected if the mortgage interest deduction were not allowed.  For, example, average homeowners with income over $250,000+ would generally see an increase in their tax bill of $5,408, if the mortgage interest deduction were not allowed.  Another way to look at it, is that homeowners with income over $250,000 on average will see a $5,408 reduction in their tax bill when taking the mortgage interest deduction.  The ultimate benefit to a particular taxpayer is a case by case analysis that depends on the timing of the home acquisition, the interest rate of the loan, the principal of the loan, income level, other itemized deductions, etc.

JS Realty Tax Eliminating the MID

Points paid that are associated with initial acquisition indebtedness or are associated with the substantial improvement of a principal residence may be fully deductible.  Points paid that are associated with the acquisition indebtedness of a second home must be amortized over the life of the loan.  Points paid on all refinances must be amortized over the life of the loan.  All other settlement costs are required to be capitalized and added to the basis of the property.

Every home has real estate taxes and those are deductible as well.  And unlike qualified residence interest that can be deducted on a principal residence or second home, the real estate taxes paid on all of your properties is deductible, even if you own more than two properties!

Home Sale Sell JS RealtyA final major tax advantage comes when it is time to sell your home.  If you own and live in your home for two of five years and you haven’t sold another home within the two years prior to the sale date, the gain on the sale, up to $250,000 ($500,000 for married filing jointly), is excluded from income tax.  The con side to this exclusion is that any loss on personal residence is not deductible.

There are significant tax advantages to owning a home, and several rules and restrictions in place on the tax treatment of various items.  Consult your tax advisor on the proper treatment for your situation.  Should you need a tax advisor, Thompson Greenspon is happy to assist with your tax preparation and planning needs.

JS Realty Thompson Greenspon logo4035 Ridge Top Road #700, Fairfax, VA 22030
(703)385-8888  |


One of the questions Sellers ask us when placing their home on the market is, “How much are we going to sell my house for?” Naturally, all Sellers want their home to sell for the most money possible. That’s a great goal to have, and the JS Realty Team @ Samson Properties has some great tips on how to accomplish that goal.

5 Ways to Get Top Dollar For Your Home:

Meeting Realtor ContractsThis is arguably the single most important step. Your Agent needs to know the market and neighborhood very well. You’ll want to hire an Agent with a lot of experience, but in this industry, experience doesn’t equal years in business. What you want to look for is the number of transactions. Finding an Agent that has sold a lot of homes shows you that the agent is successful in selling homes and knows how to negotiate for you. Transaction Experience is the best way for an Agent to learn negotiating skills. Your Agent should also have an extensive marketing plan that includes professional photos, a virtual tour, social media platforms, and a strong web presence. Another important element of a strong listing Agent is monitoring feedback and communicating with you – the Seller.

PRICE YOUR HOME CORRECTLYJS Realty empty pocket shortIf you over price your home, you will reduce the number of showings with qualified, serious buyers – because they will know the neighborhood and market. Serious Buyers will have been tracking your neighborhood and today’s Buyers are in tune with the market value. We have heard Sellers say “Let’s just try this price and see what happens”. That strategy does not work well because the first two weeks the home is on the market is when the most buzz and excitement for the new listing is happening. If the Seller has overpriced the home, Buyers will look elsewhere and your listing will lose out on the initial enthusiasm. If the Seller stays overpriced for too long, then the listing becomes “stale” and that tends to encourage low ball offers.

JS Realty Rent Sell Landscape HomeThe old adage “you never get a second chance to make a first impression” is very apropos when selling your home. Make sure the front yard, front door, and surrounding area is in top condition. As the Buyer approaches your home and are waiting to get in, they are feeling their first impressions, so make it shine! If you are going to upgrade, concentrate on kitchens, baths, floors, and walls. These will give you the most bang for your buck. Inexpensive fixes like paint, replacing old drapes, replacing door handles, kitchen and bath hardware, light fixtures, and leaky, rusty faucets can go a long way on a tight budget. For more ideas on sprucing up your home check out last week’s blog!

JS Realty calendar close upIt seems like everyone these days has a crazy, busy schedule. It can be difficult, but if you make your home available for showings and try not to limit the showing times, that can go a long way towards finding the right Buyer and the right price! The key to getting a great contract is to have as many people as possible seeing your home. If you miss out on a Buyer because of restricted showing times, you could have missed your best offer.

JS Realty Samson Team Real Estate RealtorsWith over $200 million in sales, the JS Realty Team @ Samson Properties has the transaction experience, market knowledge and marketing program to help you achieve the goal of selling your home for top dollar. Our web strategy and social media campaign have helped hundreds of Sellers maximize their homes value.

Contact us today! We would be more than happy to show you our program for selling homes.

JS Realty Free Analysis Contact UsThe JS Realty Team – not only serving Brambleton, serving all of Northern Virginia



Generally speaking, a loan refinance is a new loan to replace an old loan. Let’s look at the various reasons why a refinance would be appropriate.

JS Realty Business Man Text Save How

LOWER MONTHLY PAYMENTS – If your current interest rate high, refinancing at a lower rate can save you significant money each month. For example, if your loan amount was $300,000 and your rate is 5%, your monthly Principal and Interest (P&I) payment would be $1,633 per month. If you refinance the same $300,000 at a rate of 4%, your monthly P&I payment would be $1,432 or a savings of $201 per month. This equates to a savings of $2,412 per year and will save you $12,060 in five short years!

JS Realty Interest RatesLOWER INTEREST RATES – Interest rates can be lowered due to a change in the industry as a whole, such as the example above. Interest rates can also be lowered by shortening the term of the loan. 15 year rates will be lower than 30 years loans. Adjustable Rate Mortgages (ARM’s) are loans that are fixed for a specific time period such as 3, 5 7 or 10 years and will typically be offered at rates lower than a 30 year fixed loan.

SHORTEN LOAN TERM – A loan refinance can be considered as a way to reduce the length of your loan. Changing from a 30 year loan to a 15 year loan can greatly reduce the number of payments needed to pay off your loan. This is often used by borrower’s who have increased incomes since the beginning of their initial loan and can afford the higher monthly payments.JS Realty Loan Terms Paperwork

CHANGE FROM ‘ARM’ TO FIXED – Adjustable Rate Mortgages are fixed for a period of time and then they begin to adjust or change rates on an annual basis. Refinancing to a fixed rate term alleviates potential rate increases that can occur with the ARM’s.

COMBINE TWO LOANS INTO ONE – When purchasing a home, many borrowers obtain two loans to reduce the amount of down payment or to keep from paying mortgage insurance. As the value of the home increases, a single mortgage can replace both loans at a lower rate than the original two loans.JS Realty Refinance Application Form Pen

ELIMINATE MORTGAGE INSURANCE – Initial loans with a down payment of less than 20% will often have monthly mortgage insurance payments as part of the mortgage payment. Also, FHA loans include monthly mortgage insurance payments that you continue to pay for as long as you own the loan. As the loan balances decrease and property values increase, refinancing into a new loan with a loan-to-value of  at least 80% will eliminate the need for mortgage insurance payments.

CASH OUT –With enough equity in a property, refinancing is a great way to get cash that can be used for virtually any reason.
Some examples may be:JS Realty Refinance Monney Calculator Bills

-Home Renovations/Additions
-Auto purchase
-Boat purchase
-Medical bills
-College Education
-Pay off other debts that carry higher interest rates such as credit cards

If any of these scenarios seem to match your situation, please feel free to contact me to discuss how a mortgage loan refinance can benefit you.

JS Realty Keith Harris
Keith Harris
NMLS # 838973

Keith Harris
Senior Loan Officer
Intercoastal Mortgage Company
Direct: (703) 259-0788
Cell:    (703) 395-6601





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The JS Realty Team – not only serving Brambleton, serving all of Northern Virginia.


JS Realty Flag LoCoEarlier this month the JS Realty Team at Samson Properties provided a market analysis of Brambleton in Ashburn, Virginia. Today we are going to expand the market update to include all of Loudoun County, and compare the trends of the whole county to what we saw in the Brambleton subdivision.

Q1 2015 Loudoun County Market Update – Full Report

The Loudoun County housing market has also had a strong first quarter. The sold dollar volume is up + 19.56% from JS Realty Where Market Going Newspaperthe previous year and units sold are also up +16.88%. The percentages are obviously not as large when compared to Brambleton, but keep in mind we are looking at Loudoun County as a whole, not just one of its most popular subdivisions. When you compare average days on the market in Loudoun County to the previous year you will see a modest increase from 58 in 2014 to 81 in 2015. This can be mostly attributed to the increase in inventory from the year before – classic “supply and demand”. Overall, similar to Brambleton, the whole county is experiencing a market that is on the move in a positive way.

The JS Realty Team also mentioned previously that the “buzz” in the lending world was that interest rates were going to rise slightly over the summer. We have seen that come to fruition over the last couple weeks. They have crept up a little, but are still close to historical lows.

JS Realty Buyer Seller Road SignWe expect this positive market to continue for the foreseeable future. The JS Realty Team has stayed busy helping our clients achieve their goals through the buying and selling of homes. It has been a great year so far and we look forward to helping even more of our clients in the remainder of 2015.

Have a great summer! Don’t hesitate to contact a JS Realty Team member with any questions or to get a FREE no obligation home/market analysis on your home.

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The JS Realty Team – not only serving Brambleton, serving all of Northern Virginia.