Interest payments on a residential mortgage - assuming the mortgage isn't larger than the purchase price of the home - are fully deductible in most circumstances. That is a key reason why home ownership is a superb tax shelter.Mortgage interest on a second home is also deductible. If you own a third home for personal purposes, the mortgage interest is treated as "consumer loan" interest is not deductible, with some limitations.
Tip: If you are planning to buy a home with a large amount of cash, consider carefully if you plan to ultimately finance the property. For interest to be deductable on a financing more than 90 days after closing, it will be limited to the original acquisition loan balance plus $100,000, unless the new financing is used to improve your home.
Be sure to keep careful records of when and how much you spend on home improvements when you refinance your home or take out a home equity loan. Consult your tax advisor about the deduction of interest payments when you refinance with a higher loan amount to take money out of the refinancing or pay off other debts.
If you are caught up in a subprime mortgage or a adjustable rate mortgage and need to refinance, consider a FHA mortgage. Contact me at : findit@LehighValleyRealty.com to help you get a permanent mortgage program. Have a great day!
1 comment:
Hi Jeff,
The information on Mortgage interests is quite interesting. As we move into the last month of 2007, mortgage interest rates are continuing to decrease. They are now at the lowest point in more than two years, thus opening a bit wider the door of opportunity for home buyers. It’s now at the lowest rate since January of last year. This is a popular option for many homeowners who are now refinancing their mortgage. :)
LiveMortgageFree
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