2018 Mortgage Interest Deduction Update
There have been a few changes to the rules of the homeowner Mortgage Interest Deduction that took place in 2018.
The Mortgage Interest Deduction is used to reduce your income tax liability when you have a mortgage loan on your personal residence and or on a second home.
When mortgages have been originated after December 14, 2017, the interest on the first $750,000 of the mortgage qualifies for the Mortgage Interest Deduction. The qualifying loan amount has been reduced by $250,000. For loans originated prior to December 14, 2017, interest on the first $1,000,000 of mortgage qualifies for the Mortgage Interest Deduction.
The guidelines for Home Equity Lines of Credit (HELOC) have also been changed added a few new limitations.
To qualify to take the Mortgage Loan Deduction in 2018, the HELOC needs to be used to substantially improve the residence securing the Home Equity Line of Credit. The Home Equity Line must be used only to fund improvements that add to the property’s market value, extend the property’s useful life, or used to remodel the property to residential use.
If the Home Equity Line is used for other purposes such as college tuition, vacation or personal item purchases, the interest is no longer deductible.
These new changes are supposed to be in effect until the beginning of 2026.
To read the complete article, please see Mortgage Interest Deduction Changes in 2018.
For information regarding available Mortgage Loan Programs or Today’s Interest Rates, please visit Treasury Funds Home Loans.