If you close in the new year, your first mortgage payment is due in February. Tax deductions shift to the new tax year. This can be tax advantageous.
Closing in January means you will not have mortgage interest to deduct until the following tax season, but it also gives you the full year to benefit from the homeownership tax benefits.
First Payment After a New Year Closing
When you close in January, your first mortgage payment is typically due on March 1. This is because mortgage payments are paid in arrears. If you close on January 15, your first payment covers the period from January 15 through January 31 and is due on March 1. This gives you a full month before your first payment is due. For buyers in San Antonio and the Texas Hill Country, this can ease the transition into homeownership.
Tax Planning for New Year Closings
Closing in the new year means your mortgage interest and property tax deductions will apply to that year's tax return, which you will file the following April. If you expect a higher income in the coming year, waiting to close in January may give you a larger tax benefit. Conversely, if you want the deduction sooner, closing before December 31 is the better strategy.
