Colorado home equity loan
Putting more money in your pocket

Did you know that you can give yourself a $4000 a year raise by having a mortgage?  Yes you can give yourself a raise by simply owning a home and having a Colorado home equity loan tied to your property.  Colorado home equity loan interest is tax deductable and as a result, will lower your yearly tax obligations. Every payment made to your Colorado home equity loan requires that you pay a very large portion to interest.  You can deduct all of this interest from your taxes throughout the year.  You can also deduct origination points from your closing.  You can ask me more about that later.  Here is how your tax deductions work; let’s say you have a house payment of $1500.  That payment will be broken down on your Colorado home equity loan statement into several parts.  Depending on how your Colorado Home equity loan payments are broken down, will determine the exact amount of tax deduction you can take.  Anything being taken out of your payment for interest would be the tax deductable portion of your Colorado Home Equity loan payment. On a $1500 a month payment the interest portion will probably account for about $1200 per month.  When you multiply that out over 12 months you would have paid $14400.  Given the amount of Colorado Home equity loan interest paid, and using a standard 30% tax bracket, you can account for how much of that $14400 you should be getting back.  If you are in the 30% tax bracket your tax refund would be around $4200. 

Your Colorado Home Equity loan interest just put another $4200 in your pocket yearly, assuming that you are claiming zero or one on your W-4’s.  By claiming zero or one on your W-4’s you are putting yourself in the highest tax point for your income.  You might be better served by putting yourself in a lower tax point and settling for a lower yearly refund.  Your goal should be to spread out the Colorado Home Equity loan cash back over each pay period versus once a year.  You can accomplish this by increasing your W-4 deductions, which will lower the amount pulled out in taxes from your paycheck.  This reduction will increase your net income every month.  You can quickly see how your Colorado Home Equity Loan has opened up your income related cash flow. 

Here is how you can calculate the number of deductions to take for your interest paid on your Colorado Home equity loan.  For every $3000 in interest you pay you can claim one addition deduction.  Every time you claim a higher number of deductions your tax obligation goes down.  In this case ($14400 / $3000 = about 5) you would then need to add 1 for yourself, giving you a total of 6 deductions that can be taken.  By having a Colorado home equity loan you could have a total of 6 deductions including yourself.  These deductions could not be made if you were not a home owner.  By taking 6 deductions on your w-4 form you drastically reduce the tax amounts being withheld.  This will translate into more net dollars in your wallet monthly versus yearly.  It is that simple.  So next time you look at buying and you have a maximum payment in mind imagine what you can afford if you add $300 to your income, it could put you in the home of your dreams.  Let the Colorado Home Equity loan deductions work in your favor.