3 Tips To Get A Reverse Mortgage Tax Deduction [mortgagefraud101.blogspot.com]
Guest perspective: Preserving mortgage interest deductions on your taxesFirst, do no harm. Sounds simplistic, but it's the bottom line when it comes to your “homeowners' exemption†(more formally, the mortgage interest deduction or MID). The MID al. Guest perspective: Preserving mortgage interest deductions on your taxes
In this video, we explore the mortgage tax deduction and discover what it real is. By so doing, we dispel the myth that says that this mortgage tax deduction is a stand-alone benefit to getting a mortgage.
mortgagefraud101.blogspot.com Mortgage Tax Deduction
The reverse mortgages are for those seniors 62 or over, who have fixed incomes and who own their homes, where they live permanently. The reverse loan makes it possible to tab a part of the home equity either as a lump sum, as periodic payments or as a credit line.
As the reader may know, the reverse mortgages have zero payments during the running time without a special agreement. If no costs or fees are paid during the running time, a reverse mortgage tax deduction is not possible. In this sense the reverse loan and the traditional mortgage behave differently.
1. The Reverse Mortgage Tax Deduction Is Possible, If Some Fees Or Interests Are Paid.
This is natural, because how a taxpayer could deduct something, which he has not yet paid. Usually the benefit of a reverse loan is that no costs, capital nor interests are paid during the loan running time.
All are paid, when the running time is out, a senior moves away or pass away. Then the capital , costs and the interests are paid using the selling price of the home, or if it does not cover everything, the mortgage insurance, which is obligatory. Now a senior or the heirs can use the reverse mortgage tax deduction.2. There Is One Exeption.
No rules without exceptions. A wise senior, who takes a reverse loan thinks a situation, when he wants to prepay the loan. If this is not in the agreement, it is not possible but if it is, a senior can pay the capital, fees and the interests away, or just part of them, and get the reverse mortgage tax deduction. How wise! This is a very useful option, because you never know, how and when the financial situation will change to the positive direction.
3. What, If A Borrower Will Pass Away During The Running Time?
If this happens, a borrower cannot deduct the paid interests or fees. That is the duty of the relatives or heirs. However, the sum can be quite big one, especially if there has been a long running time. As a summary we can say, that the reverse loan is different compared to the usual mortgage. The great principal is, that every single sum must be paid before it can be deducted. This general rule decreases the chances to a minimum. However, a wise senior will take this as a part of the reverse loan agreement.
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