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Tax Benefit to Owning a Home and Having a Mortgage | Martini Mortgage Group

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Are you among the many future and current homebuyers, excited with the prospect of purchasing a new property? While it’s certainly an exciting time for anyone, regardless of your experience level, it’s important to be educated about all aspects of becoming a homeowner – including understanding the potential of substantial tax benefits to owning a home and having a mortgage.

Did you know that homeowners that itemize tax deduction can deduct interest on an up to $750,000 of mortgage balances used to buy, build or improve a qualified home (see IRS Publication 936)?  

With the mortgage interest tax deduction, the cost of borrowing may be lower than you think! 


Most homebuyers and some current homeowners don’t understand and are surprised that their cost of borrowing is significantly reduced by this tax benefit.

Kevin Martini

As discussed, homeowners who itemize tax deductions can deduct the interest on up to $750,000 of mortgage balances used to buy, build or improve a qualified home. In the past few years, not as many homebuyers benefited from this because their total annual interest expense was lower than their standard deduction. In 2023, for married couples filing jointly for tax year 2023 the standard deduction will be $27,700. For single taxpayers and married individuals filing separately, the standard deduction is $13,850 for 2023

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IMPORTANT: Uncle Sam will never help you pay your rent however he will help you pay your mortgage vis-à-vis Home Mortgage Interest Deduction however to take advantage you must itemize your taxes not take the standard deduction.

The Kevin Martini 3 Step Process to Calculate Impact of Home Mortgage Interest Deduction

  1. Determine Marginal Tax Rate
  2. Know Mortgage Rate
  3. Very Simple After-Tax Benefit Math

Determine Marginal Tax Rate

What is your marginal tax bracket? A marginal tax rate is the rate that applies to your last dollar of taxable income. In other words, the highest bracket homebuyer’s income falls into. At the time of publication, there are seven federal income tax brackets (i.e. 10%, 12%, 22%, 24%, 32%, 35% and 37%). Determine which bracket you are in based on how you file (i.e. a single filer or married filing jointly).

2023 Single Filers Tax Bracket (for illustration only)

2023 single filers tax bracket best raleigh mortgage broker

2023 Married Filing Jointly Tax Brackets (for illustration only)

2023 married filing jointly tax bracket best raleigh mortgage broker

Know Your Mortgage Rate

You need to know what your mortgage rate is not you Annual Percentage Rate (APR).

Very Simple ‘After-Tax Benefit’ Math

This step is very simple but does have 3 components

#1 Express the tax bracket as decimal

#1 Express the tax bracket as decimal … for illustration and example ONLY, let’s assume a 24% marginal tax bracket so in decimal form that is expressed as 0.24

#2 Subtract the decimal from the whole number one

#2 Subtract the decimal from the whole number one … for illustration and example ONLY, we would take one minus the marginal tax bracket expressed as a decimal hence, 1 – 0.24 = 0.76

#3 Multiple that number by the the current or actual mortgage rate

#3 Multiple that number by the the current or actual mortgage rate … for illustration and example ONLY. let’s use a mortgage rate of 6.5% so 6.5 x 0.76 = 4.94

In the example above, your mortgage rate is 6.5% and your are in a 24% tax bracket then your after-tax rate in 4.94% assuming that you itemize your taxes. That means, the Home Mortgage Interest Deduction saves you 1.56%!

While there are many exciting aspects to purchasing a new home, it is important to be educate about all aspects of becoming a homeowner – including understanding the potential of substantial tax benefits to owning a home and having a mortgage. With the mortgage interest tax deduction, the cost of borrowing may be lower than you think! If you’re considering homeownership, connect with either Kevin Martini or Logan Martini today so we can help you take advantage of this amazing opportunity.

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Kevin Martini

Certified Mortgage Advisor | NMLS # 143962

Martini Mortgage Group at Gold Star Mortgage Financial Group, Corporation | NMLS # 3446 | 507 N Blount St, Raleigh, NC 27604 | (919) 238-4934 | www.MartiniMortgageGroup.com | [email protected] | Equal Housing Lender

    logan martini

    Logan Martini

    Senior Mortgage Strategist | NMLS #1591485

    Martini Mortgage Group at Gold Star Mortgage Financial Group, Corporation | NMLS # 3446 | 507 N Blount St, Raleigh, NC 27604 | (919) 238-4934 | www.MartiniMortgageGroup.com | [email protected] | Equal Housing Lender

      PLEASE NOTE: THIS ARTICLE IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL, TAX, OR FINANCIAL ADVICE. PLEASE CONSULT WITH A QUALIFIED TAX ADVISOR FOR SPECIFIC ADVICE PERTAINING TO YOUR SITUATION. FOR MORE INFORMATION ON ANY OF THESE ITEMS, PLEASE REFERENCE IRS PUBLICATION 936. Also, this article is not an offer or commitment to lend you money, and it is not an advertisement for a specific mortgage or a specific interest ratehttp://2023 Raleigh Conforming Loan Limits

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      How Does The Gift Tax Work When Using Gift Funds To Buy A Home By Raleigh Mortgage Broker Kevin Martini 
      What You Need To Do Before Buying a Home in Raleigh
      2023 Raleigh Conforming Loan Limits

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      Helping Homebuyers Become Homeowners

      Freeze It and Opt Out

      What You Need To Do Before Buying a Home in Raleigh

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      Are you thinking of buying a home in Raleigh? Before you dive into the process, it’s important to make sure that you are prepared for the journey. Here are three Martini Mortgage Group key things that you can do to get ready to buy a home in Raleigh or anywhere in the U.S. for that matter.

      Prepare Your Credit

      Before applying for a mortgage loan, it’s important to make sure your credit is in good shape. Mortgage lenders typically require a good credit history for you to qualify for a mortgage. This means having several credit cards and installment loans with payments made on time for the past two years, as well as making all rent payments on time during that period.

      A good credit score will ensure that you have access to better mortgage rates and loan terms. You can look at your free credit report from the 3 major bureaus (Equifax, Experian, and TransUnion) once per year as well as order copies of your credit reports from each bureau through annualcreditreport.com. It’s important to review all of your reports closely and address any discrepancies or errors with the respective bureaus.

      For more information about credit, check out: Martini Mortgage Podcast | Episode 167 | Freeze it and opt-out

      Prepare Your Cashflow

      It’s also important to take a close look at your income and expenses before beginning the process of buying a home in Raleigh.

      Make sure that you understand how much money is coming in and going out each month, so that you can begin planning for what kind of house payment you can afford on top of any other existing debts or expenses. Knowing how much money is available for down payments and closing costs will help set realistic expectations about what kind of home you may be able to purchase in Raleigh.

      It’s also important to make sure your debt-to-income ratio is not too high. Most lenders require that your total monthly debt payments (including the new mortgage payment) should not exceed 43% of your monthly income. If your debt-to-income ratio is higher than 43%, consider paying down some debts before taking out a new loan or try finding ways to increase your income.

      Prepare Your Savings

      Mortgage lenders typically require you to have a certain amount of savings in reserve in order to qualify for a mortgage. Your savings should be in your account for at least two months in order to qualify, and any large deposits will need to be explained and documented.

      The amount of the required savings will vary based on the loan program that you choose. However, a good goal is to save enough for a 3%-5% down payment, plus 1-3 months of mortgage payment reserves.

      For example, if your new mortgage payments will be $3,000 per month, you should probably aim to save approx. $9,000 plus the amount of your down payment.

      Start budgeting now so that when it comes time to make an offer on your dream house, you’re prepared financially too!

      Martini Mortgage Group Bottom Line

      Buying a home can be an exciting experience – but first you need to make sure that you are prepared financially by having good credit history and cashflow situation plus enough savings set aside for closing costs and fees associated with the purchase of the home. By following these three Martini Mortgage Group steps – preparing your credit, cashflow and savings -you will be well on your way towards becoming a homeowner in Raleigh!

      If you have questions about buying a home or about securing the proper mortgage, let’s connect so you have expert advice on your side.

      Kevin Martini

      Kevin Martini | NMLS 143962 | Certified Mortgage Advisor | Martini Mortgage Group at Gold Star Mortgage Financial Group, Corporation | NMLS # 3446 | 507 N Blount St, Raleigh, NC 27604 | (919) 238-4934 | www.MartiniMortgageGroup.com | [email protected] | Equal Housing Lender

      Logan Martini

      Logan Martini | NMLS 1591485 | Senior Mortgage Strategist | Martini Mortgage Group at Gold Star Mortgage Financial Group, Corporation | NMLS # 3446 | 507 N Blount St, Raleigh, NC 27604 | (919) 238-4934 | www.MartiniMortgageGroup.com | [email protected] | Equal Housing Lender

      Things to Know and Consider when Buying a Home (Martini Buyer Guide | Winter 2022)

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      If you are a first-time homebuyer or a repeat homebuyer, there are many things one needs to know and consider when buying a home.  Certified Mortgage Advisor Kevin Martini and Senior Mortgage Strategist Logan Martini curated the Winter 2022 Martini Buyer Guide to simply explain the current real estate and mortgage markets plus vital information about buying a home and the process of getting a mortgage.  The Winter 2022 edition of the Martini Buyer Guide has many informative articles that talk about things one needs to know about the current real estate and mortgage markets. 

      winter 2022 martini buyer guide
      Winter 2022 Edition of Martini Buyer Guide

      If you are buying real estate, if you are selling real estate, if you are refinancing a mortgage or if you work in the real estate arena then the Winter 2022 Martini Buyer Guide would be very helpful since it simply explains the current real estate and mortgage opportunity.

      The Winter 2022 Martini Buyer Guide was curated to simply explain what is going on in the real estate and mortgage markets.

      Logan Martini, Raleigh Mortgage Broker & Senior Mortgage Strategist

      Contents of the Winter 2022 Martini Buyer Guide (things to know and consider when buying a home)

      best raleigh mortgage broker logan martini

      What is happening in the market?

      With everything going on in the housing market right now, you may have a number of questions about what that means for you and your plans to buy a home. Here are three things that are likely top of mind for you.

      • Why did Raleigh mortgage rates rise so much in 2022?
      • What is happening with home prices in Raleigh?
      • Should I buy a home in Raleigh today?
      raleigh mortgage lender martini mortgage group what is happening in the housing market page 1 of 2 winter 2022 martini buyer guide
      raleigh mortgage lender martini mortgage group what is happening in the housing market page 2 of 2 winter 2022 martini buyer guide

      Expert insights for today’s homebuyers

      If you want to buy a home today in Raleigh or anywhere for that matter, here are a few things experts say you should know about what to expect and why homeownership is so important.

      raleigh mortgage lender martini mortgage group expert insight for todays homebuyers winter 2022 martini buyer guide

      Trends that are good news for Raleigh homebuyers

      As the Raleigh real estate market has cooled but still remains strong, some of the intensity buyers faced during the peak frenzy of the pandemic has cooled too! Here are four trends that may be beneficial when you go to buy a home today.

      1. More homes to choose from
      2. Bidding wars have eased
      3. More negotiation power
      4. Higher loan limits
      raleigh mortgage lender martini mortgage group trends that are good news for raleigh homebuyers winter 2022 martini buyer guide 1 of 3 1
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      2/1 Buydown

      Increasing Raleigh mortgage rates are presenting some challenges and opportunities not just for first-time homebuyers but also to repeat homebuyers too! Leap over the challenges and into the opportunity with a creative mortgage strategy offered by the Martini Mortgage Group called a Seller Paid Buydown.

      raleigh mortgage broker kevin martini steer paid buydown winter 2022 martini buyer guide
      FREE BUYDOWN CALCULATOR

      In most markets in North Carolina, especially in the Triangle, homebuyers will find that sellers are more willing to negotiate on price or other terms more than they have been in recent years.

      Logan Martini, Raleigh Mortgage Broker & Senior Mortgage Strategist

      5 traps to avoid when buying a home

      raleigh mortgage broker logan martini winter 2022 martini buyer guide 5 traps to avoid when buying home 1 of 3
      1. Home shopping before a solid mortgage approval.
      2. Not considering the costs of sale.
      3. Overlooking the costs of improvements, utilities and maintenance.
      4. Using the wrong down payment strategy.
      5. Shopping for a mortgage vs. shopping for the right mortgage professional.
      raleigh mortgage broker logan martini winter 2022 martini buyer guide 5 traps to avoid when buying home 2 of 3
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      Top reasons to own your home!

      • Personal Expression
      • Accomplishment
      • Investment
      • Comfort
      • Family
      • Community
      • Privacy
      • Stability

      The non-financial benefits of homeownership

      While you could see less competition and more room for negotiation, you may be wondering if now’s the best time to buy a home given Raleigh mortgage rates are higher than they were last year. While the financial aspects are important to consider, there are also powerful non-financial reasons it may make sense to become a homeowner. See the full article on page 16 of the Winter 2022 edition of the Martini Buyer Guide.

      Things to avoid after applying for a mortgage!

      raleigh mortgage broker kevin martini winter 2022 martini buyer things to avoid after applying for a mortgage page 1 of 2
      raleigh mortgage broker kevin martini winter 2022 martini buyer things to avoid after applying for a mortgage page 2 of 2 png

      Why buying a home makes better sense than renting

      If there is a time to rent, that time is not now.

      Kevin Martini, Certified Mortgage Advisor and Raleigh Mortgage Broker

      The long-term benefit of homeownership

      Consider this: if you know people who bought a home 5, 10, or even 30 years ago, you’re probably going to have a hard time finding someone who regrets their decision. Why is that? The reason is tied to how you gain equity and wealth as home values grow with time.

      raleigh mortgage broker kevin martini winter 2022 martini buyer benefit of homeownership page1 of 2
      raleigh mortgage broker kevin martini winter 2022 martini buyer benefit of homeownership page 2 of 2
      Things to Know and Consider when Buying a Home (Martini Buyer Guide Winter 2022)Download

      Let’s chat…

      I’m sure you have questions and thoughts about securing the proper mortgage with the lowest cost of borrowing and real estate process.

      We’d love to talk with you about what you’ve read in the Winter 2022 Edition of the Martini Buyer Guide and help you on the path to buying your new home. Our number is (919) 238-4934 and we look forward to working with you.

      logan martini raleigh mortgage lender with martini mortgage group 2

      Logan Martini

      Senior Mortgage Strategist | NMLS 1591485

      [email protected]

        kevin martini best raleigh mortgage broker

        Kevin Martini

        Certified Mortgage Advisor | NMLS 143962

        [email protected]