MORE ON THE MORTGAGE INTEREST DEDUCTION

Recent speculation over eliminating or reducing the mortgage interest deduction has caused widespread rumors and myths about the vital tax benefit for homeowners. The MID is not only crucial to the stability of the American housing market and the overall economy, but any changes to it could lower the homeownership rate in the U.S.

“As the leading advocate for homeownership, Realtors® believe the MID makes a real difference to homeowners, especially hard-working middle-class families,” said Bob Neuwoehner of American Realty. “This fundamental tax benefit reduces the carrying costs of owning a home, making homeownership more attainable for families. It also helps those without thousands of dollars in savings who cannot buy their home outright begin to build their financial future through homeownership.”

As Congress has looked for ways to address the deficit, some have suggested placing additional limits on the MID. We question the connection public policy makers are trying to make between the debt and the MID.

“It’s ridiculous to say that the MID is suddenly part of the deficit problem – the MID has been part of the federal tax code for nearly 100 years,” said Mr. Neuwoehner “Reducing or eliminating it is a de facto tax increase on homeowners, who already pay 80 to 90 percent of U.S. federal income tax. That share could rise to 95 percent if the MID is eliminated.”

According to the 2011 National Housing Pulse Survey, Americans are adamantly against eliminating the MID. Two-thirds of respondents opposed eliminating the MID, and 73 percent of Americans said eliminating the MID would have a negative impact on the housing market and the overall economy.

We also dispute the misconception that only the wealthy benefit from the MID, when in reality it primarily benefits middle- and lower income families. Almost two-thirds of those who claim the MID are middle-income earners; 65 percent of families who take the MID earn less than $100,000 a year, and 91 percent earn less than $200,000 a year.

“Is focusing solely on tax rates a better goal than protecting the wealth of the middle class?” “Changes to the MID could further damage the housing market’s recovery as well as the overall economy and job market. It is imperative that the MID remain intact and that Americans continue to receive this important benefit.”

HOUSING ISSUES CURRENTLY BEING DEBATED IN CONGRESS

HERE ARE SOME HOUSING ISSUES CURRENTLY BEING DEBATED IN CONGRESS THAT SHOULD BE OF INTEREST TO YOU.....

Mortgage interest decuction (MID)-This is one way some politicians are trying to address the deficit problem - they want to eliminate the MID. How about that!! Take your real estate taxes and multiply it by your tax rate and that's about how much it will cost you. You say you don't agree with that? Better contact your representatives soon!!!

Penalties for down payments less than 20%. A loan that is 80% or less of the value of the property being purchased (usually the purchase price of the property) is called a Qualified Residential Mortgage or (QRM). In a nut shell buyers who can't come up with 20% down would be required to pay .8 to 1.85% more interest. There was a time when that was probably appropriate. But given the situation now, and with the underwriting requiements that are in place now it does not make much sense to me. How about you???

FHA loan limits The FHA has been a big part of the backbone of home ownership for years. They help people who may not have that 20% down and who may not have high credit scores become homeowners. Some politicians want to shrink FHA and limit the number of buyers it supports. Bad idea in my book.

Give some thought to these issues. When you do remember that housing is a huge part of our national economy. SHARE YOUR THOUGHTS, WHATEVER THEY ARE, WITH YOUR LIGISLATORS AND REPRESENTATIVES