SAN DIEGO, May 25, 2014 /PRNewswire-iReach/ -- LoanLove.com is a borrower advice website that offers in-depth information on home loans that experienced home buyers can benefit from in an easy-to-understand and entertaining way that even first-time borrowers will be able to grasp. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals and has the mission of helping consumers and borrowers to obtain the latest information on mortgage lending news, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love. A recent article from the borrower advice website continues to help people get the most out of homeownership by looking at the ins and outs of mortgage interest tax deduction savings.
This Loan Love guide says, "There are a lot of very good reasons to leave renting behind and join the ranks of home owners. But probably one of the biggest—and most commonly touted—is the ability to get a tax break by deducting the mortgage interest paid. If you are like most homeowners, nearly all of your mortgage payment every month is going toward interest and not your loan's principle. The good news for taxpayers is that all that interest is deductible, as long as you itemize and don't just take the standard deduction. Unless, of course, you had to take out a home mortgage of over $1 million. In that case, you can expect the Internal Revenue Service (IRS) to limit your mortgage interest deduction. More good news? It isn't only your home's first mortgage that paves the way for a tax break via a mortgage interest deduction. If you refinanced to improve your cash flow picture, or secured a home equity line of credit or home equity loan, you also get a tax break. The IRS allows you to take a full mortgage interest deduction for equity loans or credit lines up to $100,000."
The article explains that this mortgage interest tax deduction is also available to those who own multiple properties, and some boats may qualify for an interest deduction if they are used as second living quarters and have bathroom, cooking, and sleeping facilities.
Those who pay points to lower the interest rate on their loan may also be able to deduct these when it is tax time. The Loan Love guide says, "The IRS allows taxpayers to deduct points in the same year they pay them if the following holds true:
- The loan is for the purchase or construction of your primary residence
- Payment of points is an established business practice for your area
- The points you claim fall within the typical range
Different rules apply for homeowners who pay points during refinancing. In most cases, these points need to be deducted over the lifetime of the loan, on a per month basis for 12 months per tax year, rather than all in one year."
The guide gives some more details regarding tax deduction rules for homeowners then ends by saying, "…the mortgage interest deduction is the biggest personal tax deduction available to taxpayers. Its popularity with politicians has rarely dimmed and it is often help up as the pathway for making home ownership—and the American dream—attainable for the middle class. Even so, the larger the home mortgage, the greater the deduction. It is the wealthiest tier of the middle class that comes out ahead with tax breaks from mortgage interest, though every home owner will benefit. Mortgage interest deductions alone are not going to be the trigger to move more renters into the home ownership arena. The measure is, however, the icing on the cake for those families ready to enjoy home ownership."
For more information on this topic, click here to view the full guide at LoanLove.com.
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SOURCE Loan Love