Taxpayers with Mortgages Want to Know

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,
Mike

Michael Pattullo
Mortgage Advisor MLO# 229675
360.607.9312
mpattullo@peakmtg.com
Peakmtgnw.com
12503 SE Mill Plailn Blvd., #250, Vancouver, WA