Property Tax Deduction is Back in Play

The recently passed "Big Beautiful Bill" reinstates property tax deductions, a boon for homeowners. Below are a couple of properties with 5% down, and how they break down for our clients when they go to purchase. I want to clarify that they still need to come up with the full payment, but the tax breaks are substantial, especially when combined with the principal reduction and the appreciation that you will likely receive.

$700,000 Condo

• Down Payment: $35,000
• Loan Amount: $665,000
• Principal and Interest: $4,318.25/month
• Taxes: $729.17/month
• Insurance: $125/month
• PMI: $193.81/month
• Total Payment: $5,366.23/month + HOA

Tax Deductions (24% Bracket)

• Condo ($700,000):
• Year 1 Interest: $44,581.25
• Property Taxes: $8,750/year
• Total Deduction: $53,331.25/year
• Tax Savings: $12,799.50/year or $1,066.63/month
• Principal Reduction $7989.00 / 665.75 monthly
• Appreciation $28,000 = $2333.33 monthly

True Net Cost of Ownership (Year 1) Condo:

• Monthly Payment: $5,366.23 + HOA
• Less Tax Savings: $1,066.63/month
• Less Principal Reduction: $665.75/month
• Less Appreciation: $2,333.33/month
• True Cost: $1,300.52 + HOA

$950,000 SFR

• Down Payment: $47,500
• Loan Amount: $902,500
• Principal and Interest: $5,859.92/month
• Taxes: $989.58/month
• Insurance: $356.25/month
• PMI: $262.88/month
• Total Payment: $7,468.63/month + HOA

Tax Deductions (24% Bracket)

• SFR ($950,000):
• Year 1 deductible Interest: $50,625.00 (capped at $750,000 limit)
• Property Taxes: $11,875/year
• Total Deduction: $62,500/year
• Tax Savings: $15,000.00/year or $1,250.00/month
• Principal Reduction $10,839/year or $903.25/month
• Appreciation 4% = $38,000/year or $3166.67/month

True Net Cost of Ownership (Year 1) SFR:

• Monthly Payment: $7,468.63 + HOA
• Less Tax Savings: $1,448.38/month
• Less Principal Reduction: $903.25/month
• Less Appreciation: $3,166.67/month
• True Cost: $1,950.33 + HOA

Takeaway

The added property tax deduction, paired with interest write-offs, significantly reduces the net cost of ownership. This makes now an ideal time for your clients to buy.

Please let me know if you have any questions or if a client needs my guidance. I’m just a call, text, or email away.

📞 Cell: 661-714-6258

📞 Direct Line: 661-291-2222

📞 Office: 661-260-2970 ext. 2222

📧 Email: Mike@AugustaFinancial.com

But wait, there’s more…

Interest Rates

Two moderately better days have not made up for the last week of rate increases! Yes, there is talk of rate cuts in the future, but pulling the trigger too soon could trigger a resurgence in inflation.

Loan Programs

• We do loans on Non-warrantable condos!
• We offer 12-day escrows for pre-approved buyers - Conventional/FHA/Jumbo/Bridge loans.
• We provide loans in all 50 states, so call me with anything you need.
• Government loans (FHA/VA/USDA) are in the high 5’s and low 6’s.
• Conventional loans up to $806,500 are in the low to mid 6s.
• High Balance Loans from $806,501 to $1,209,750 are also in the 6’s and 7’s.
• Jumbo loans above $1,209,750 are in the 6’s and 7’s.
• Bank statement loans are available with 10% down again, with larger down payments in the 6’s++.
• Profit and Loss Statement loans require 20% down - no bank statements needed, only a profit and loss statement!
• 0 down loans are available in the high 6s, with a minimum credit score of 620, up to $1,300,000.
• Private Money lenders offer Hard Money Loans with 35% down.
• No Ratio Loans require 30% down.
• DSCR (Debt Service Coverage Ratio) loans are available with as little as 15% down.
• Bridge Loans typically have an interest rate of 7.99% with limited fees, helping you get where you need to go!
• 3/2/1 Buydowns, 2/1 Buydowns, and 1/0 Buydowns are available at great starting rates!

Please note that interest rates are subject to change without notice, and the information above reflects LA County Loan Limits.

**Good News for Condos:**   

**Bad News for Condos***

American Beauty Village East – On the naughty list! The HOA is stating that approximately 20% are now delinquent on HOA dues. We are working on one of these now, and I wiill update you if something changes, but agents, be aware!

BIG NOTE –

This is the second condo with over 15% delinquency in the past week, indicating that people are starting to struggle with paying all their bills. Stay tuned for more enlightening BS from me! LOL!

The full state of California’s naughty list has been added to: MikeMeena.com! See the link below:

https://mikemeena.com/non-warrantable-condos/

Let me know if you hear anything new about condos or townhouses.

I am available every day if you need anything.

📞 Cell: 661-714-6258

TEXT: 661-714-6258

📞 Office: 661-260-2970 ext. 2222

📞 Direct Line: 661-291-2222

📧 Email: Mike@AugustaFinancial.com

Have a great day and an even better tomorrow! Please call me when you have a client who needs to borrow!