Under Trump Tax Plan, Would You Still Deduct Mortgage Interest? #realestate #homeownership #finances

Source:  Bankrate.com

The mortgage interest deduction would survive under President Donald Trump's tax reform plan.  But fewer homeowners would use it.  The reason is that the standard deduction would be almost doubled, leaving the mortgage interest deduction only for homeowners who pay the most interest - those are the people with the biggest home loans.

Tax reform will take a long, convoluted path through Congress.  Any bill that is signed into law will differ from what was proposed originally.  If the expanded standard deduction makes it through, you'll probably pay less taxes overall, but without using the mortgage interest deduction.  Here are some steps you can take:

- If you plan to buy your first home within a few years, consider saving up for a bigger down payment.  If you're not going to deduct your mortgage interest, you will benefit from having a smaller mortgage and thus paying less interest.

- If you own a home, consider getting a home equity line of credit before tax reform passes.  Your home's value could fall in the future, reducing the equity to borrow from.  So you might be able to get a bigger credit line now than you will after tax reform is passed.  

- If you file jointly and deduct more than $24,000 a year, cheer up -- you might get to keep deducting mortgage interest, depending on the details of the tax reform that's eventually passed.  Shop for a jumbo mortgage if you're a big earner.

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