Home mortgage tax deduction limit

A home for sale in September

You can deduct the interest that you pay on your mortgage loan if the loan meets IRS mortgage requirements.

When you repay a mortgage loan, the payments are almost completely composed of interest rather than principal in the first few years. Even later on, the interest portion can still be a significant portion of your payments. However, you can deduct the interest that you pay if the loan meets IRS mortgage requirements.

Mortgage loan requirements

In order for your mortgage payments to be eligible for the interest deduction, the loan must be secured by your home, and the proceeds of the loan must have been used to buy, build or improve your main residence, plus one other home you own that you also use for personal purposes.

If you rent out your second home to tenants during the year, then it’s not being used for personal purposes and doesn’t qualify for the mortgage interest deduction. However, rental homes will qualify if you also use it as a residence for the greater of 15 days or more per year or more than 10 percent of the days you rent it to tenants.

Mortgage balance limitations

The IRS places several limits on the amount of interest that you can deduct each year. If you took out the mortgage before Oct. 14, 1987, all of the interest on the mortgage can be deducted regardless of the amount you borrow. For all other mortgages, you can only deduct the interest that accrues on the first $1 million of mortgage loans.

If you are married and file a separate return from your spouse, then the limitation decreases to $500, 000. These limits are cumulative for all of your mortgage debt on both homes. For example, if you are single and have a mortgage on your main home for $800, 000, plus a mortgage on your summer home for $400, 000, you would only be able to deduct the interest on the first $1 million, even though both loans are each under the $1, 000, 000 limit.

National Mortgage Settlement All But Inevitable

2012-02-08 17:21:07 by haikuwhore

Five of the nation's largest banks forged documents and wrongfully foreclosed on borrowers??
I'm shocked, just shocked
Note, CL Cons have been defending the banks and disparaging home owners...
New York Attorney General Eric Schneiderman and California Attorney General Kamala Harris are joining the national mortgage servicing settlement, making a deal that includes all 50 states all but inevitable, according to a source who spoke Wednesday evening on condition of anonymity.
"It's hard to see any state staying out of the deal if California is in," said the source

My CH7 2nd Mortgage Settlement Idea good idea??

2009-07-01 20:12:28 by PCN

Would this have a reasonable chance of success? (1st mortgage is more than recent appraisal.) File ch7. After filing, atty contacts 2nd mortgage holder and tells them something like this: "My client has filed ch7. The home is valued xxx less than the first mortgage. We would like to settle the 2nd for x% of the balance, but, if you are not interested, we will convert to a ch13 with a lien strip and you will get essentially nothing along with the unsecured creditors.
Could this give a person a "safety net" to test the waters with the 2nd holder? Per her initial calculations, we would have a very small ch13 payment (~$100/mo) if we were forced to go that route

Losing Home

2007-11-01 10:21:09 by quartermoon51

My estranged has not paid the mortgage in 2 years even thought judge ordered it in pendente lite. My house will be auctioned off in 2 weeks. Tried to save the home. Can not between paying for daycare and everything else he refuses to pay for. Home is going. FYI... he was suppose to pay for a percentage of daycare and CS per the pendente but has not. Basically he refuses.
He told be last night that if I sign an agreement to waved all arears for everything and sign a settlement agreement he will file bankruptcy and this will allow us to stay in the home for 6 months or longer.
I think this is just a ploy to get out of the arears

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