How Will the Elimination of Mortgage Interest Deduction (MID) Affect YOU?

July 12, 2013 at 5:13 pm Leave a comment

by: Maria Hass –
CNBC published a July 9, 2013, story regarding some Congress members’ desire to change the existing Mortgage Interest Deduction (MID) tax code this year.
Under the current tax code, homeowners get to deduct mortgage interest from their income taxes, saving them money.
Why change the MID tax code? Simply put, our government is broke and is looking for ways to raise funds to finance its expenses — some of which are unreasonable.

How would the eradication of MID affect YOU the homeowner, homebuyer and the taxpayer?
1. Homeowner – You will see NO tax deduction, which means you end up paying more for your house than before. The higher the price of the home, the more savings you lose.
Because there is NO help from the government on your mortgage interest, many homeowners may decide to pay off their loans, and the lending business may weaken.

2. Homebuyer – There will be more cash buyers since lending money doesn’t provide any tax deductions. Home buying will become less attractive, and some may decide to rent rather than purchase a home. The real estate market may weaken as a result.

3. Taxpayer – The MID tax break is a benefit to us all — homeowners, investors and home buyers. We would all be affected by this tax deduction being eliminated. This is another way of using our money to fund the expenses of other people like the benefits for the irresponsible, non-performing segment of society — or the extravagant spending of politicians, headed by the President himself, whose family takes luxurious vacation trips with fares paid by taxpayers.

In the end, one way or another, politicians will prevail. Many will argue until they are blue in the face and fight to keep their own MID savings. After all, many Congress members own expensive houses and second homes. It all boils down to what is good for them.
For a full story, go to http://www.cnbc.com/id/100872995

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate, Real Estate Deals. Tags: , , , .

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