When determining your tax benefits, you need to gather together quite a bit of information. Among the pieces of information you will need are:
- The current value of your home
- The number of years before you plan to sell the home
- The amount of your loan
- The interest rate on your loan
- The length of your loan
- The number of points applied to your loan
- The closing costs when you purchased the home
- The annual taxes for the property
- The annual insurance for the property
- The PMI rate
- The Federal tax rate
- The State tax rate
- The amount of your deductions
After plugging in all of this information, you can determine the tax benefit of your home, which will help you determine the amount you are really paying for your mortgage each month.
If your home has a value of $300,000.00, for example, and you take out a loan for $250,000.00, your total monthly payment may come out to $1,821.22 (after considering all of the other factors described above). Due to the savings you will receive from your tax benefit, however, your average payment will be $1,559.95 during the first 5 years. If you'll decide to live in your home after this period, you will only pay $1,540.81 per month in average.