
When you buy a primary residence, you benefit from numerous perks—if you occupy your home long enough.
Not only can you get tax breaks for the mortgage interest you pay—up to $750,000 of debt if you bought after 2017—you can avoid paying capital gains on your home when you sell—up to $500,000 for married joint filers and $250,000 for singles. But you must have lived in the home for two out of five years as your primary residence.
When you sell your home, it typically takes about five years to build enough equity (the amount you own vs. the bank) to cover the closing costs on both the sale and your next purchase. These costs include agent commissions, mortgage fees, and other transaction expenses. You can build equity in several ways: through a larger down payment, regular or extra mortgage payments, home improvements, and natural appreciation.
To estimate your equity, contact your Berkshire Hathaway HomeServices network professional for a market value analysis. Then simply subtract what you owe from your home’s current value.