Although much of the focus is on border security, Congress has another big decision to make in the coming months: the renewal of certain tax breaks. Homeowners who itemize their deductions may still deduct the interest they paid on their home loan in 2018 but only up to certain limits.
In a tax code change that could disproportionately affect those living in pricier markets like California, the mortgage interest deduction is now capped at $750,000, down from $1 million for married couples. This applies to new home loans originated in 2017 or later. The new law also eliminates unlimited interest deductions for both new and existing home equity loans unless the loan was taken out to pay for property renovations.
Borrowers who purchase a home with a less than 20 percent down payment are often straddled with private mortgage insurance. In the past, some of these premiums were deductible however Congress has yet to extend this tax break for this tax season.
Today, conforming no-point 30-year fixed mortgage rates are averaging 4.375 percent, 15-year rates are near 3.75 percent and the 5-year ARM is averaging 4.25 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.