Obama Proposes Reduction to Mortgage Interest Deduction
Obama Proposes Reduction to Mortgage Interest Deduction
Obama Proposes Reduction to Mortgage Interest Deduction
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February 15, 2011 (Chris Moore)
MORTGAGE-DONT-TREAD-IMAGE
One of President Obama’s Deficit Reduction Commission’s recommendations appears to have hit home. Normally considered to be a “sacred cow” and expected to be furiously fought by the housing and building industry, the President has proposed a reduction in the mortgage interest deduction for high income taxpayers in his 2012 budget.

The proposed budget would reduce by 30 percent the amount that high earners can save on their federal tax bill by claiming itemized deductions, such as for mortgage interest, charitable giving and state and local taxes. Such taxpayers would see their tax savings limited to 28 percent of their itemized deductions, down from 39.6 percent currently.

The rule change would apply to couples with annual incomes of $250,000 or more, or single taxpayers with incomes of $200,000 and above.

Currently, interest on a mortgage taken out to buy or improve a home can be fully deducted if the amount of the loan is less than $1 million for married couples and $500,000 for singles. Home equity loans taken out for anything else is limited to $100,000 for couples and $50,000 for singles.

Advocates of the housing and building industry including the National Association of Realtors (NAR), the National Association of Home Builders (NAHB), and the Mortgage Bankers Association (MBA) have all previously attacked the Deficit Reduction Commission’s proposal when it was released last December.

“The tax deductibility of interest paid on mortgages is a powerful incentive for homeownership and has been one of the simplest provisions in the federal tax code for more than 80 years,” said NAR President Ron Phipps at the time.

The proposal also faces an uncertain future in Congress, which rejected a similar proposal last year, when Democrats had the majority.

Under the proposal, a high-earning couple with a $500,000 mortgage at a 5.5 percent interest rate would see their taxes increased by about $2,900 a year, assuming roughly $25,000 in interest paid. Such a family can currently save up to $9,800 with a 39.6 percent deduction, falling to about $6,900 with a 28 percent limit.

Tags: mortgage interest deduction, high income taxpayers, mortgage interest, itemizaed deductions, nar, nahb, mba, deficit reduction commission

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Mortgage
Calculator

Estimate your monthly mortgage payment
Auto Loan
Calculator

Determine how much car you can afford before buying
Learn About
Mortgage Loans

Learn about the different types of home loans
15 Year vs 30 Year
Loan Comparison

Compare 15 year and 30 year mortgage loans
Todays Mortgage
Rates

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February 15, 2011 (Chris Moore)
MORTGAGE-DONT-TREAD-IMAGE
One of President Obama’s Deficit Reduction Commission’s recommendations appears to have hit home. Normally considered to be a “sacred cow” and expected to be furiously fought by the housing and building industry, the President has proposed a reduction in the mortgage interest deduction for high income taxpayers in his 2012 budget.

The proposed budget would reduce by 30 percent the amount that high earners can save on their federal tax bill by claiming itemized deductions, such as for mortgage interest, charitable giving and state and local taxes. Such taxpayers would see their tax savings limited to 28 percent of their itemized deductions, down from 39.6 percent currently.

The rule change would apply to couples with annual incomes of $250,000 or more, or single taxpayers with incomes of $200,000 and above.

Currently, interest on a mortgage taken out to buy or improve a home can be fully deducted if the amount of the loan is less than $1 million for married couples and $500,000 for singles. Home equity loans taken out for anything else is limited to $100,000 for couples and $50,000 for singles.

Advocates of the housing and building industry including the National Association of Realtors (NAR), the National Association of Home Builders (NAHB), and the Mortgage Bankers Association (MBA) have all previously attacked the Deficit Reduction Commission’s proposal when it was released last December.

“The tax deductibility of interest paid on mortgages is a powerful incentive for homeownership and has been one of the simplest provisions in the federal tax code for more than 80 years,” said NAR President Ron Phipps at the time.

The proposal also faces an uncertain future in Congress, which rejected a similar proposal last year, when Democrats had the majority.

Under the proposal, a high-earning couple with a $500,000 mortgage at a 5.5 percent interest rate would see their taxes increased by about $2,900 a year, assuming roughly $25,000 in interest paid. Such a family can currently save up to $9,800 with a 39.6 percent deduction, falling to about $6,900 with a 28 percent limit.

Tags: mortgage interest deduction, high income taxpayers, mortgage interest, itemizaed deductions, nar, nahb, mba, deficit reduction commission

FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
HOW LOANRATENETWORK
LOAN CENTER WORKS
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.
Helpful Tools

February 15, 2011 (Chris Moore)
MORTGAGE-DONT-TREAD-IMAGE
One of President Obama’s Deficit Reduction Commission’s recommendations appears to have hit home. Normally considered to be a “sacred cow” and expected to be furiously fought by the housing and building industry, the President has proposed a reduction in the mortgage interest deduction for high income taxpayers in his 2012 budget.

The proposed budget would reduce by 30 percent the amount that high earners can save on their federal tax bill by claiming itemized deductions, such as for mortgage interest, charitable giving and state and local taxes. Such taxpayers would see their tax savings limited to 28 percent of their itemized deductions, down from 39.6 percent currently.

The rule change would apply to couples with annual incomes of $250,000 or more, or single taxpayers with incomes of $200,000 and above.

Currently, interest on a mortgage taken out to buy or improve a home can be fully deducted if the amount of the loan is less than $1 million for married couples and $500,000 for singles. Home equity loans taken out for anything else is limited to $100,000 for couples and $50,000 for singles.

Advocates of the housing and building industry including the National Association of Realtors (NAR), the National Association of Home Builders (NAHB), and the Mortgage Bankers Association (MBA) have all previously attacked the Deficit Reduction Commission’s proposal when it was released last December.

“The tax deductibility of interest paid on mortgages is a powerful incentive for homeownership and has been one of the simplest provisions in the federal tax code for more than 80 years,” said NAR President Ron Phipps at the time.

The proposal also faces an uncertain future in Congress, which rejected a similar proposal last year, when Democrats had the majority.

Under the proposal, a high-earning couple with a $500,000 mortgage at a 5.5 percent interest rate would see their taxes increased by about $2,900 a year, assuming roughly $25,000 in interest paid. Such a family can currently save up to $9,800 with a 39.6 percent deduction, falling to about $6,900 with a 28 percent limit.

Tags: mortgage interest deduction, high income taxpayers, mortgage interest, itemizaed deductions, nar, nahb, mba, deficit reduction commission

HOW LOANRATENETWORK
LOAN CENTER WORKS
FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT
CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.