If you’ve recently bought a home with a veteran home loan or are planning on applying for a VA loan in the near future, you may be wondering what tax benefits are associated with your purchase.
With a traditional mortgage, homeowners can deduct property taxes and interest they’ve paid over the course of the year. But what about VA home loans? What tax benefits and deductions are available to VA borrowers?
Here’s everything you need to know.
Tax Deductions for VA Home Loans
There are a few different tax deductions that VA borrowers can take advantage of. The main ones are:
- Mortgage interest payments
- Discount points
- VA funding fee
- Paid property taxes
- Moving expenses
Mortgage interest is the interest you pay to your lender for your VA loan. Your mortgage company will provide you with a statement each year that shows the amount of interest you’ve paid.
Discount points are fees paid to a lender that lower a borrower’s interest rate. Even if these points are paid by the seller, you may still be able to deduct them on your taxes.
VA Funding Fee
When you took out your VA loan, you most likely paid a VA funding fee. This fee helps to lower the cost of the loan for U.S. taxpayers. Most of the time, VA borrowers are able to deduct 100% of this fee on their taxes.
If you had to move because of a permanent change of station (PCS) or military order, you may be able to deduct a portion of your moving expenses.
How Do I Know What Tax Deductions I Qualify For?
The only way to know for certain what tax deductions you qualify for is to consult an expert. Someone who is familiar with the tax laws that apply to you and your state will be able to point you in the right direction. This could be a tax attorney, Certified Public Accountant, tax consultant, or financial advisor.
Make sure that they know that you’re both a VA borrower and new home buyer. That way, they are fully aware of your situation and can help you take advantage of all the benefits that may be available to you.
Learn More About Veteran Home Loan Benefits
Tax deductions aren’t the only benefits of veteran home loans. Qualifying borrowers may also be able to take advantage of benefits like a zero percent down payment, low closing costs, and a competitive interest rate. Reach out today to learn more about the benefits or get started with the application process.