Just about everybody in this country pays taxes, but nearly 70% of Americans pay less tax just by owning a home. In addition to making an investment in homeownership and watching their equity appreciate year after year, homeowners get the additional benefit of paying lower taxes.

As a homeowner you can deduct mortgage interest and property taxes when you file your yearly Income Tax Return and itemize those deductions. For example, if you purchase a Franciscus home for $250,000 with a 30-year mortgage at 6.25% interest and your real estate taxes are approximately $2,500 per year, your itemized deductions would be $15,625 for interest, plus the $2,500 for real estate taxes.

A total deduction of $18,125. If your household gross income was $60,000, your itemized deductions could result in a tax savings of approximately $4,000 yearly. (Consult your tax preparer for details).

In addition to your tax savings, you have the possibility of equity appreciation in the value of your home. Home equity is the value of a home minus any mortgage debt. It may be surprising to learn that more than 50% of the total net wealth of the typical American family comes from the equity build up from homeownership. A recent Federal Reserve consumer financial survey shows that the median net wealth of a homeowner is $171,700, while the wealth of a typical renter household is only $4,800. Typically, home values rise at the general rate of inflation plus one to two percentage points. Don’t forget home appreciation is based on the total value of the property, not on an individual’s cash down payment. It’s not unusual to find that a homeowner’s cash investment rate of return from appreciation is 100% to 200%.

Another source of wealth is the amortization or pay down of the principal of the mortgage loan. Paying down the loan is like a forced savings plan. Every monthly payment you make has a portion that goes towards principal which adds to your wealth portfolio year after year. When you get ready to sell your home, Uncle Sam will give you a tax break by allowing you to save taxes on the gain of the sale by buying a larger home (see your broker for details).

Wondering how difficult it is to buy a new home in today’s economic turn down?

At Franciscus Homes we’ve made it easy. We have a variety of mortgage plans tailored to match your financial ability. One such plan matches qualified home buyers with non-profit organizations who will gift the required down payment. This is truly a “gift” which does not have to be re-paid and represents thousands of dollars in instant equity at move-in.

The success ratio of our mortgage representatives with homebuyer applicants is extremely high, even with lower credit score applicants. We have more than 20 different model homes in communities throughout the Greater Hampton Roads market that will fit both your pocket book and your lifestyle. Visit us at www.franciscushomes.com.