How Will the New Mortgage Interest Deduction Change Affect You?

Mortgage Interest Deduction

• The final bill reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after 12/14/17. Current loans of up to $1 million are grandfathered and are not subject to the new $750,000 cap. Neither limit is indexed for inflation.
• Homeowners may refinance mortgage debts existing on 12/14/17 up to $1 million and still deduct the interest, so long as the new loan does not exceed the amount of the mortgage being refinanced.
• The final bill repeals the deduction for interest paid on home equity debt through 12/31/25. Interest is still deductible on home equity loans (or second mortgages) if the proceeds are used to substantially improve the residence.
• Interest remains deductible on second homes, but subject to the $1 million / $750,000 limits.
• This will have a big impact on our Bay Area housing since our average home prices are high. We may see some reduced prices on the high end, but I don't expect much change on entry or mid-level homes. 
• The House-passed bill would have capped the mortgage interest limit at $500,000 and eliminated the deduction for second homes.
• Thinking of buying or selling a home! I'm here to help. Contact Me
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Why Would You Sell Your Home in Winter?!?!?

The sky is gray, yards look bleak, you just want to hunker down with a good book and a blanket. Why think about selling your home now?
Here are a few good reasons:

1. Housing Inventory is LOW
Unlike many other areas of the country, the Santa Clara County real estate market has seen prices surpass their 2007 highs with no end in sight. We have extremely low inventory and many well-qualified buyers desperate to find a home. I receive emails every day from agents begging for off-market listings for their buyers who have lost out on multiple offers. In most of my transactions this past year I have had buyers who were more than willing to tailor their offer to work with buyers' needs, including rent backs, long escrows, short contingency periods, etc. This is a sellers' marke

2. Low Interest Rates
Yes, the Feds raised interest rates at the end of last year. That being said, they are still ridiculously low. We expect them to go up as the year progresses, so take advantage of them now, while buying power is still strong. If you are not only selling your home but looking to purchase a replacement, this is doubly important.
3. Tax Benefits
Yes, this is still the largest tax break for qualified taxpayers on capital gains for the sale of their personal residence. Single taxpayers may exclude up to $250,000 on capital gains and couples up to $500,000.

If you have any questions, please feel free to contact me. I also welcome opinions and personal testimonials.