Interest accrued on loans secured to your primary or secondary residence could be used as a tax deduction.  Qualifying loans used to purchase, build, or improve a property could include a mortgage, a second mortgage, a line of credit, or a home equity loan.  The maximum loan limit on these types of loans just increased from $750,000 to $1 million ($100,000 for home equity loans), which provides a great opportunity for more clients.

To be considered for these write-offs borrowers must be contractually obligated to the debt and be responsible for payments.  For example, if a husband and wife are on the loan together, they are both eligible to deduct the interest.  However, if a father is making their daughter’s payments but is not on the loan, the father is unable to write off the mortgage interest.

Another qualifier to look at for this deduction is the category of which a property is deemed.  The property must be considered a home.  Homes are defined as property that includes sleeping, cooking, and toilet facilities.  Examples of a home could be houses, condos, mobile homes, and even boats.

There are unique situations that can be considered regarding deduction qualification.  For those that have a second home, interest acquired on second homes with rental income can be deducted if the borrower has occupied it for more than 14 days or 10% of the days rented, whichever is greater.  Or, if one has multiple properties, it can identify different homes as their second home each year with the same requirements mentioned above.  In regards to early occupancy, if a borrower occupies a property prior to closing on the home, the payments made prior to the mortgage being secured in their name is considered rent and does not qualify for mortgage interest write off.  When refinancing, the interest incurred on the refinanced loan can be deducted.  Additionally, the points paid to obtain the refinance loan can be eligible for deduction when spread out through the life of them.

To take advantage of these deductions, one would just need to provide records of the Mortgage Interest Statement (Form 1098), closing statement and tax return from last year (for refinances), and/or information of the person you pay mortgage interest to (if not the lender).

Give our team a call today to discuss your situation and qualification for your mortgage interest deduction.

 

Aligned Mortgage - Waipio
94-539 Puahi Street
Waipio, HI 96797
NMLS #1696573
Licensed in Hawaii -Texas -Oregon -California
Waipio@AlignedMortgage.com
Phone 808-677-5626

Aligned Mortgage - San Antonio
1027 Austin Hwy STE 101
San Antonio, TX 78209
NMLS #1695733
Licensed in Texas - California
SanAntonio@alignedmortgage.com
Phone 210-874-1630

 © 2018 American Pacific Mortgage Corporation. All information contained herein is for informational purposes only and, while every effort has been made to ensure accuracy, no guarantee is expressed or implied. Any programs shown do not demonstrate all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions apply. Equal Housing Opportunity.
Consumer Access    Privacy Policy     Disclosures
Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act.

Consumers wishing to file a complaint against a company or a residential mortgage loan originator should complete and send a complaint form to the Texas Department of savings and mortgage lending, 2601 north Lamar, Suite 201, Austin, Texas 78705. Complaint forms and instructions may be obtained from the department’s website at www.sml.texas.gov. A toll-free consumer hotline is available at 1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at www.sml.texas.gov.

X