First Time Buyer – Newbie Question

[Hattrick]

Been lurking for a bit, and would like to say thanks to everyone for the constructive and informative posts and links.

Like many, I’ve been sitting on the sidelines watching for the last several years wondering if someone with any common sense would ever be able to truly afford to live here given the run up in prices. As we have seen things begin to come down, I find that I actually qualify for home (that I would want to live in) and could “afford”.

The question I have for you all is more tax / income based. I make 180K a year, but have been told by many that if / when I buy a home that my withholdings should change to zero out the tax savings (interest on the loan) – what does that roughly work out to be? I will not spend more than 580K on a property, while I have the cash to go much higher in terms of downs, I refuse to be house poor and like my lifestyle too much to take on these huge payments when you run the numbers.

Anyway – thank you all for the help.

[surveyor]

taxes!

For a $580k house, assuming you put 20% down, at an interest rate of about 6%, you should expect to pay about $39,934 in mortgage interest. Also, you could probably expect to pay around 1% in property taxes, so add $5,800 to that value as well.

So, you’re looking at around $45734 to offset against your salary.

If you want to calculate and run the numbers in Microsoft Excel, the formula is:

=PMT(0.06/12,12,580000*0.8,0,0)

Or of course run through any of the excellent mortgage interest calculators available on the Internet.

[surveyor]

taxes!

For a $580k house, assuming you put 20% down, at an interest rate of about 6%, you should expect to pay about $39,934 in mortgage interest. Also, you could probably expect to pay around 1% in property taxes, so add $5,800 to that value as well.

So, you’re looking at around $45734 to offset against your salary.

If you want to calculate and run the numbers in Microsoft Excel, the formula is:

=PMT(0.06/12,12,580000*0.8,0,0)

Or of course run through any of the excellent mortgage interest calculators available on the Internet.

[surveyor]

taxes!

For a $580k house, assuming you put 20% down, at an interest rate of about 6%, you should expect to pay about $39,934 in mortgage interest. Also, you could probably expect to pay around 1% in property taxes, so add $5,800 to that value as well.

So, you’re looking at around $45734 to offset against your salary.

If you want to calculate and run the numbers in Microsoft Excel, the formula is:

=PMT(0.06/12,12,580000*0.8,0,0)

Or of course run through any of the excellent mortgage interest calculators available on the Internet.

[surveyor]

taxes!

For a $580k house, assuming you put 20% down, at an interest rate of about 6%, you should expect to pay about $39,934 in mortgage interest. Also, you could probably expect to pay around 1% in property taxes, so add $5,800 to that value as well.

So, you’re looking at around $45734 to offset against your salary.

If you want to calculate and run the numbers in Microsoft Excel, the formula is:

=PMT(0.06/12,12,580000*0.8,0,0)

Or of course run through any of the excellent mortgage interest calculators available on the Internet.

[surveyor]

taxes!

For a $580k house, assuming you put 20% down, at an interest rate of about 6%, you should expect to pay about $39,934 in mortgage interest. Also, you could probably expect to pay around 1% in property taxes, so add $5,800 to that value as well.

So, you’re looking at around $45734 to offset against your salary.

If you want to calculate and run the numbers in Microsoft Excel, the formula is:

=PMT(0.06/12,12,580000*0.8,0,0)

Or of course run through any of the excellent mortgage interest calculators available on the Internet.

[noone]

“So, you’re looking at around $45734 to offset against your salary.”

Just remember that this is a tax deduction, not a tax credit. So multiply by your current tax bracket, e.g. 30% of $45,734 = $13,720. This will vary depending on your filing status, number of dependants, etc..

If you’re not comfortable figuring this out on your own, you probably ought to see a CPA and go over your last few tax returns to get a better estimate. Perhaps even check out Rich’s company, Pacific Capital Associates http://www.pcasd.com/

[noone]

“So, you’re looking at around $45734 to offset against your salary.”

Just remember that this is a tax deduction, not a tax credit. So multiply by your current tax bracket, e.g. 30% of $45,734 = $13,720. This will vary depending on your filing status, number of dependants, etc..

If you’re not comfortable figuring this out on your own, you probably ought to see a CPA and go over your last few tax returns to get a better estimate. Perhaps even check out Rich’s company, Pacific Capital Associates http://www.pcasd.com/

[noone]

“So, you’re looking at around $45734 to offset against your salary.”

Just remember that this is a tax deduction, not a tax credit. So multiply by your current tax bracket, e.g. 30% of $45,734 = $13,720. This will vary depending on your filing status, number of dependants, etc..

If you’re not comfortable figuring this out on your own, you probably ought to see a CPA and go over your last few tax returns to get a better estimate. Perhaps even check out Rich’s company, Pacific Capital Associates http://www.pcasd.com/

[noone]

“So, you’re looking at around $45734 to offset against your salary.”

Just remember that this is a tax deduction, not a tax credit. So multiply by your current tax bracket, e.g. 30% of $45,734 = $13,720. This will vary depending on your filing status, number of dependants, etc..

If you’re not comfortable figuring this out on your own, you probably ought to see a CPA and go over your last few tax returns to get a better estimate. Perhaps even check out Rich’s company, Pacific Capital Associates http://www.pcasd.com/

[noone]

“So, you’re looking at around $45734 to offset against your salary.”

Just remember that this is a tax deduction, not a tax credit. So multiply by your current tax bracket, e.g. 30% of $45,734 = $13,720. This will vary depending on your filing status, number of dependants, etc..

If you’re not comfortable figuring this out on your own, you probably ought to see a CPA and go over your last few tax returns to get a better estimate. Perhaps even check out Rich’s company, Pacific Capital Associates http://www.pcasd.com/

[Author]

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