In order to reduce the budget deficits, both democratic and republican parties seem to agree that eliminating certain tax breaks is the way to go. Homeowners are allowed to deduct mortgage interest from their yearly tax. When the tax cuts come under congress’ microscope, mortgage interest deduction will most likely be discussed.
The authorities may put a cap on mortgage interest deduction. If that is the case, many households in the country will struggle with their finances. Currently, many speculations are being made about this, and until the government reaches a final conclusion there will be an air of uncertainty.
As discussed previously, the housing sector is showing signs of recovery, foreclosures are down from last year, and the mortgage rates are slowly rising. For homeowners struggling to make timely payments, and for those fighting foreclosure, a cap on the mortgage interest deduction would come as a major financial blow.
At Amerihope Alliance Legal Services, we have worked with countless homeowners barely being able to make their monthly payments. Mortgage interest deductions provide a much needed financial relief at the end of the year.
The analysts and economists in favor of limiting or rolling back the deduction believe that such a move would help reduce the budget deficit. However, others are strongly against it, and believe that it would create an extremely negative impact not only on the housing sector but on the economy in general.
If the deduction is reduced or rolled back, several homeowners would face increased financial troubles, leading to missing mortgage payments. According to an estimate by the National Association of Realtors, housing prices will drop by 15% if the deduction is removed.
Relief programs introduced by the Obama administration have helped out several homeowners who otherwise would have lost their homes. We hope that the government continues on its path to help the average homeowner, and does not remove mortgage interest deduction.
If you are a homeowner looking for legal representation to fight off a foreclosure, get a free consultation from our loan modification attorneys and foreclosure defense attorneys. Amerihope Alliance Legal Services has helped several homeowners keep their homes, and we can do the same for you. Feel free to contact us.
We are also looking forward to your opinion on the matter in the comments section.