Economists and politicians alike have been talking recently about removing the mortgage interest rate on tax returns. Many Americans rely on this tax deduction, and have even gone so far as to equate this tax deduction into their financial planning on whether or not they can afford to buy that new home. If this deduction is removed, the financial disparity between owning a home and renting a home comes much closer together. Currently, the mortgage interest deduction makes it a much more financially wise decision to own a home because of the yearly tax savings – even taking into consideration the fact that homeowners only live in their home for seven years.
However, without the yearly mortgage interest rate tax deductions, buyers are going to need to practice Buying Smart much more thoroughly. In many cases, without the tax write off, buying a home is a bit more expensive than leasing a similar quality home. If you as a buyer are paying more to purchase, you’re going to need to be much more ‘smart’ on how you invest in your home.