Much is said about the great tax benefits of becoming a homeowner. you should know that the interest you pay on your mortgage loan will usually be completely tax deductible. Depending on the size and terms of your loan. Closing costs are made up of a laundry list of various charges. They include things like lenders fees, real estate appraisals costs, private mortgage insurance, homeowners insurance, recording fees, title searches and title insurance, as well as many other possible costs. If you have to pay pro-rated property taxes, these will also be tax deductible. if you have to pre-pay any mortgage interest as part of your closing costs, that interest will be tax deductible. mortgage points! These are deductible. This is a percentage of the loan amount that you pay your lender at closing to basically â€œbuy downâ€ your interest rate. Another exception comes if the property you are buying is a rental or investment property. In this case the transfer taxes that are a part of your closing costs will be deductible. Things like hazard insurance or association dues for rental properties are also tax deductible. Check with your financial advisor for more specifics on the tax benefits related to rental/investment home loans. All this information are provided in the financial closing package and the settlement statement (HUD) you sign at closing. And keep property improvement receipts you may be legible for tax benefits, if related to energy saving.