| |
Tax Deductions
| |
| Each payment consists of interest
and principal (let's ignore taxes and insurance for this
example.) |
| |
| The lender takes his cut (the
interest payment first). The remainder of the payment is applied
to the principal. |
| |
| Each month you pay
a little more toward the loan payoff. |
| |
| The Interest
Portion of the Payment is Tax Deductible. (as
opposed to rent which is not) |
| |
| In the
early years of the mortgage, most of the
payment is tax deductible. Saving The
Homeowner Lots of Money. |
|
|
|
| |
| Purchase Price -
$368,450 |
|
| 5% Down - $18,422 |
|
| Interest Rate
6.0% |
|
| Total Loan -
$350,000 |
|
| |
|
|
| |
Payment |
Interest |
Principal |
Loan
Balance |
| Month
1 |
$2,098 |
$1,750 |
$348 |
$349,652 |
| Month
2 |
$2,098 |
$1,750 |
$350 |
$349,301 |
| Month
3 |
$2,098 |
$1,750 |
$352 |
$348,949 |
| Month
4 |
$2,098 |
$1,750 |
$354 |
$348,596 |
| Month
5 |
$2,098 |
$1,750 |
$355 |
$#48,240 |
| Month
6 |
$2,098 |
$1,750 |
$357 |
$347,883 |
| Month
7 |
$2,098 |
$1,750 |
$359 |
$347,524 |
| Month
8 |
$2,098 |
$1,750 |
$361 |
$347,163 |
| Month
9 |
$2,098 |
$1,750 |
$363 |
$346,801 |
| Month
10 |
$2,098 |
$1,750 |
$364 |
$346,436 |
| Month
11 |
$2,098 |
$1,750 |
$366 |
$346,070 |
| Month
12 |
$2,098 |
$1,750 |
$368 |
$345,702 |
| |
$25,181 |
$20,883 |
$4,298 |
|
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|
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|
|
|
|
| Total
Payment $25,181 |
| |
|
Total
Interest Paid $20,883. The Interest portion is tax
deductible. |
|
| |
|
This
amount applied towards the principal is your equity in
the property $4,298 |
| |
|
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|
Ask DC's Condo Guy ! |
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Need Help?
Want more
information |
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