First Time Home Buyer Mortgage Advice

by Jill from Southern California, USA

Hi Kate, I have some first time home buyer mortgage advice for your Readers. I started to think about the first house we bought and how was I really going to afford it being a newlywed.


I remember that one of the things I did which made sense for us. It required a little homework and a talk with a tax professional.

By looking at the tax deduction benefit of our mortgage and estimating what the tax deduction would be, we were able to determine what our refund would look like.

Because it worked out that we would get one, we decided not to use the government as a saving vehicle!

Working with a tax professional, we were able to figure out the number of deductions we could claim with changes to the W4 withholding such that by the end of year we would not be getting a large refund.

By increasing the number of deductions, it put more money in our pockets every month. This in turn gave us more cash flow every month that we put toward our mortgage!

I know that you are not a tax professional but the idea is that if people work with the numbers they may see that they can ease the mortgage payment with the right kind of tax planning.

Now this was in 1982 so things most likely have changed. But at the time, it was something like for every $1,000 or $2,000 in interest deduction you could claim one dependent.

Hard to remember exactly but the point is - this provided a way to get more cash flow every month by not overpaying the government. In other words, you get to use your money vs the government using it.

We decide that for every $1,000 that we expected as a refund, we could change the number of deductions on our W4 that represented the amount of over payment being deducted. Then we retained this money every pay period in our paycheck.

Our target was by the end of the year to not have a large overpayment coming back to us from the government. We planned for no more than $100.00 that we either got back or owed the government.

The effect of this strategy actually put money into our pockets every month which help to ease the mortgage payment. --Jill

Kate Answers: First Time Home Buyer Mortgage Advice

Hi Jill, As always, thanks for sharing your first time home buyer mortgage advice. I don't think there is much for me to add!

Best Wishes,


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