Will Congress Take Away Mortgage Deduction as Part of the “Fiscal Cliff”?

Many people are worried if congress will take away mortgage deductions as part of the “fiscal cliff” negotiations. Therefore, I have good news for the majority of homeowners. The answer is no, you should not be worried. Despite what you have been hearing, congress and the President will not take away the mortgage deduction. Changes to the deduction program will happen and could include limiting the combination of spending cuts and increases in revenue. However, these changes are geared for high-end homeowners.

As the deduction program stands now, homeowners can deduct the interest on their mortgage up to $1 million on their primary residence only. So, one of the proposals to change is to reduce the amount to $500,000, which will still help wealthy homeowners deduct the interest on the first $500,000 of their mortgage. That could save high-end homeowners $20,000 or more. For those who have a second home or vacation home, you can deduct the interest up to $100,000, but that deduction may end completely if lawmakers get their way.

The amount of homeowners who would be affected by this change is nearly 11% of homeowners in the US. But they will only feel the affect if their home values at $500,000 or more. Different areas of the country will feel it more than others. In cities that have a lot of high-end real estate, you will more than likely see more of an affect.

This mortgage deduction information is brought to you by: Tom Kile – your real estate resource for Amarillo, TX and surrounding communities.

Originally posted at:  http://allamarillohomes.info/will-congress-take-away-mortgage-deduction-as-part-of-the-fiscal-cliff-negotiations/