Mortgage Interest Deduction
One of the largest motivating factors for buying real estate is the mortgage interest deduction (MID). This allows one to deduct the interest paid on the mortgage for the home from their federal taxes. And in tough times when real estate is not making incremental jumps in appreciation, the interest deduction is one of the bright spots when filing taxes. But this deduction has always been a heated topic between politicians and economist. And today, when our national debt is high and our economy is smuggling, the mortgage interest deduction talks are boiling up again.
Some say that losing the interest deduction would have a huge impact on the American Dream: to own a home. And I have to say that this is true. As a realtor, I’m constantly comparing what the cost are between buying a home vs. renting. This is a complex question and is different for each individual. Yet the mortgage interest deduction is a huge factor in the equation. Without this deduction I’d have to say the buy vs. rent question becomes very cloudy and even more difficult.