One of the more frequent questions lenders get when pre-approving a client for a new home is “How much will this new home save me on my21345_Hawthorne_Blvd_#415_bed1 copy tax bill each month”? Many home buyers use the monthly tax savings to offset the increase in housing expense that a new home can bring. The savings can help the buyer to budget for a higher priced home which could make it possible to live in a more desirable neighborhood, possibly reap the benefits of higher property appreciation and help the buyer to have better resale options.

To help illustrate a home buyers potential monthly tax savings, the below chart shows the loan amount, monthly tax savings and how the monthly tax savings could be used to increase purchasing power.

Loan Amount   Monthly Savings Increase in Purchase Power
$250,000 $297 $56,000
$300,000 $356 $67,000
$350,000 $416 $80,000
$400,000 $475 $94,000
$450,000 $534 $103,000
$500,000 $594 $113,000
$550,000 $653 $124,000
$600,000 $712 $137,000
$650,000 $772 $146,000

• Above based on mortgage interest rate of 4.75%, and a Federal Tax Brackett of 30.%
• Source: homes.yahoo.com – Figures to be verified with your CPA

About the author
Keith Kyle
Keith Kyle is a top real estate agent in the South Bay and focuses on the cities of Torrance, Redondo Beach, and Manhattan Beach. Helping both buyers and sellers Keith is a local expert in the Torrance market with South Bay Brokers and has been one of the top agents in the area since 2007.