The latest updates in real estate, the mortgage industry and the national economy are an endless source of fascination for me. Considering I’ve been in this business for nearly 17 years and I work almost every day, that is undoubtedly a good thing.
As an example, I was recently interested to learn that more than 50 percent of all first-time buyers in 2015 identified themselves as millennials. This is the group that was born between the early 1980s and 2000s. Not only are they the biggest generation, with numbers topping out at more than 75 million, they have also been characterized as one of the most civic-minded generations to come along since the G.I. generation, a.k.a. The Greatest Generation.
The civic-mindedness of millennials has been the subject of a lot of debate, but there is definitely a consensus that this generation is facing a substantially higher level of student loan debt and unemployment than their predecessors.
In my mind, this is a perfect explanation for why millennial home buyers prefer the 3 percent and 5 percent down payment options that are available to them. Even if it was within the realm of possibility to put down 20 percent, for a millennial facing an uncertain job market, it makes sense to hold on to that extra cash for a rainy day.
Figuring out a way to help people and provide a solution with a beneficial result is a big part of what I do. For me to achieve that goal, I have to really focus on analyzing situations from other people’s perspectives. With that in mind, if I were a millennial with student loan debt and worries about future employment, I would have to ask myself the following:
“How on earth will I ever get ahead?”
One of the easiest solutions is home ownership, and that is why so many millennials are jumping into the housing market. Aside from the obvious fact that everyone needs a roof over their head and that home ownership contributes to the stability of our society, the various tax advantages that originate from home ownership shouldn’t be overlooked.
Loan discount points and origination fees from the initial purchase are tax deductible, regardless of who pays them. Moreover the ongoing tax deductions can really add up. These include property taxes and the yearly interest paid on a mortgage. It’s worthwhile to note that the interest paid on a home equity line of credit each year is tax deductible. This can provide buyers with a feasible means of making improvements or renovations.
When it’s time to sell the home and cash out some equity, the savvy buyer need not worry about paying federal capital gains taxes, provided that the amount of gains do not exceed $500,000 for married couples, or $200,000 for individuals. This deduction can be used every two years without limit.
Of course, a tax adviser should be consulted before making decisions. To find out whether or not attaining a home is within your grasp, or for more information about the benefits of investing in real estate, please contact me at the number below.
Patrick Stoy (NMLS Numbers 39527 and 39166) has 16 years of mortgage lending experience. Patrick is CEO of Wilmington-based Market Consulting Mortgage, which he started in 2005 with a mission to build lifelong customer relationships by providing real value. To learn more about Marketing Consulting Mortgage, visit www.macmtg.com. Patrick can be reached at [email protected] or (910) 509-7105.