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Mortgage Interest Tax Deductions

Most people know that the mortgage interest they pay on the mortgage they used to purchase their home is tax deductible. Some people also DON'T KNOW about this tax deductions!

Dear BuildingCredibility.com visitor:

Certain mortgage interest that you pay on mortgages and home-equity loans can be deducted on Schedule A of your 1040 tax return. Let's talk about a good way to maximize the deductions you can take for interest you pay on mortgages:

Interest on home-equity loans up to $100,000 can be deducted no matter how you use the funds.

If you have a home equity loan that is secured by a mortgage on property, you can use the proceeds to pay off credit card debt, car purchases, and for other items that normally would not be deductible...up to $100,000. You can only deduct the maximum interest on home-equity debt if you have net equity in the property of at least $100,000 after taking out the obligations on the other existing mortgage(s).

When a home-equity loan is used responsibly to consolidate debt, some good tax deductions can be secured that otherwise would not be...this is a good thing! However, with the current mortgage market and some home values in question, lenders are tightening their guidelines on these and other types of mortgage products. Please call or email me if you have questions about this process.

Regards,

Eric Leigh, Mortgage Loan Officer
1419 N. MIdland Boulevard
Nampa, ID 83651
(208) 880-0316
http://www.ericsloans.com
eric@ericsloans.com

I am not a tax preparer or tax professional, so this blog entry should not be taken as legal advice. Please consult your CPA, lawyer, or tax professional for more information on the deductibility of mortgage interest.

Posted by Eric Leigh at 2/14/2008 5:11 AM

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Comments (3)

Re:Mortgage Interest Tax Deductions

Most people should know that the 'tax' deduction needs to be though of in light of your std deduction. Tax your std ded... ~$4K, $8K or so if joint. Is your interest more than this? FORMOST PEOPLE ONLYASMALL SLICE OF THIS BENEFIT IS EVER REALIZED. Please know this has long been a selling tactic of the brokers and RE agents to push deals. Make SURE YOU OR THEY DO THE MATH, and look at the bottom line savings. ---Do math

Second, taking unsecured debt and putting your house as collateral IS NOT SOMETHING YOU SHOULD TAKE LIGHTLY. Please speak to an independent advisor first (one that does not have a financial incentive for you to take a loan.)

Posted by emdeplam on 2/14/2008 9:41 AM

Re:Mortgage Interest Tax Deductions

I am no tax expert but I thought that you could only write off the interest on an equity loan if the monies were applied to \"home improvement\" not debt consolidation. In an audit you may be at a disadvantage if claiming so.

Posted by Anonymous on 2/15/2008 9:12 AM

Re:Mortgage Interest Tax Deductions

Anonymous,

Not true, although I know the direction you are coming from and why you are saying that about home improvement. I asked my CPA and other local CPA I have worked with about this before posting this blog, and both cofirmed what I posted. In addition, please reference the following article (http://www.bottomlinesecrets.com/blpnet/article.html?article_id=33404) by Janice Johnson, CPA, that she wrote for the Bottom Line Tax Hotline publication.

Regards,

Eric

Posted by Eric Leigh on 2/22/2008 8:24 AM

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