Taxpayers with Mortgages Want to Know
Posted January 14, 2018 in Real Estate Trends
Since the passing of the major tax overhaul, the new laws bring many questions about deducting mortgage interest. Here’s what is known thus far:
For taxpayers with existing mortgages, you can continue to deduct interest up to a total of $1 million of debt for a first and/or second home. New buyers this year will be eligible to deduct $750,000 of mortgages for a first and/or second home. According to an example cited by the National Association of Realtors, if you owned a home in 2017 with a $750,000 mortgage and a second home with a mortgage of $200,000; you will continue to be able to deduct the interest from both of those homes. If the home you own today has a mortgage of $750,000 and decide to purchase a second home this year, you will not be eligible for an interest deduction beyond the $750,000 of debt.
Refinanced homes in 2018, according to the National Association of Realtors, are eligible for the interest deduction up to $1 million of financing; however, the mortgage debt must have existed as of December 14, 2017. Additionally, says the Association, the new loan cannot exceed the amount of the mortgage being refinanced.
For home-equity loans, the law suspends interest deductions through 2025.
With housing appreciation growing, continuing low-mortgage interest rates, and mortgage interest deductions still available, I anticipate that home buying is a smart move in 2018. Additionally because inflation remains below 2%, I believe our market here will remain strong. So make that appointment to begin your mortgage plan!
Happy New Year!
We lend where we live,
Mortgage Advisor MLO# 229675
12503 SE Mill Plailn Blvd., #250, Vancouver, WA