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What are some of the tax benefits of home ownership?  The government rewards taxpayers who borrow to buy a house.  This is evidenced by the tax write offs given to taxpayers who purchase a home. These are the most common write offs for your personal residence. 

POINTS:  According to the IRS, origination fees charged as points must be paid for the use of money in order to be tax deductible.  If the fee was paid to obtain a lower interest rate, it is deductible, but a "service fee" is not tax deductible. The question must be asked, "Does the fee apply to the use of money, or is it a service charge?"

PROPERTY TAXES:  Pro-rated taxes paid in escrow are deductible at the time of purchase.   Property taxes, which are usually due in December and April for each tax year, are paid annually after the purchase and continue to be deductible.

MORTGAGE INTEREST:  Mortgage interest paid in escrow pro-rated to the end of the month is deductible.  However, interest paid annually on the loan is also deductible.  A lender will send the borrower a statement at the end of the year giving the amount of interest that was paid on the loan for the last year.  Big or small, it is important to take advantage of this all important deduction.                                                                                             
PRE-PAYMENT PENALTY:  Some loans require a pre-payment penalty if the loan is paid off early.  A pre-payment penalty is often charged in the beginning years of the mortgage.  The terms can be found in the note or paperwork received when the loan was initiated.  Circumstances often cause borrowers to pull out of their mortgages sooner than expected.  Fortunately, pre-payment penalties are tax deductible which can help ease the burden.

Be sure and consult your accountant for complete information regarding tax deductions and be sure and save all documents related to payments made for items you plan to deduct.