You might not receive any deductions
One of the main advantages of purchasing a principal residence is that you might receive a deduction on your home mortgage interest. For this to happen, you’ll have to itemize your tax deduction, but, it’s well worth it. However, you can itemize your deductions on your return if they exceed your standard deduction.
For example, for tax year 2018, the standard deduction increased considerably from $6,500 to $12,000 for individual filers, from $13,000 to $24,000 for joint returns, and from $9,550 to $18,000 for heads of household, so much that only 10 percent of taxpayers had to itemize.
For 2020, the standard deduction for joint filers has reached the impressive value of $24,800. How does it affect you’re your deduction? It means your mortgage will have to be quite sizable if you want to qualify for a mortgage interest deduction.