Ocean City MD & Coastal DE BeachHomes4Sale Susan Antigone - ShoreFun4U

Mortgage Interest Deduction Makes Homeownership Even Sweeter Long & Foster and Prosperity Mortgage can help you finance a summer vacation home in Ocean City MD. Ask about options and to be pre-qualified. I will help you out each step of the way to determine if now is a good time to buy real estate. Susan Antigone - ShoreFun4U homes in Ocean City MD Most taxpayers can deduct the interest on a home mortgage of up to $500,000 ($1 million for married, joint filers) used to buy, build or improve a home, plus interest on a home equity loan of up to $50,000 ($100,000 for married filers) used for any purpose. Here are 10 more things you need to know to claim your mortgage interest deduction: 1. You must file your taxes on Form 1040 and itemize your deductions. 2. You have to be legally obligated to pay the mortgage. In other words, you can’t deduct mortgage interest paid, for example, on your parents' home unless you have a legal duty to pay their mortgage. 3. The Alternative Minimum Tax rule may limit you from taking the mortgage interest deduction if your 2013 adjusted gross income is more than $51,900 ($80,800 for married, joint filers). 4. Your mortgage must be a secured debt, meaning your lender can foreclose on your home if you don’t pay your mortgage. 5. The interest on your main home and a second home is deductible. Either one can also be a boat, mobile home, house trailer, condominium, cooperative or similar property, which has cooking, sleeping and toilet facilities. Certain other exceptions apply. 6. You can deduct late payment charges as though they were interest as long as your lender didn’t perform a specific service in exchange for the fee. 7. If you pay off your home mortgage early and you have to pay a prepayment penalty, that amount also counts as interest, as long as your lender doesn’t charge the fee in exchange for a specific service performed or to cover the cost of something connected to your mortgage (like giving you a payoff statement). 8. If you make annual or periodic rental payments on a redeemable ground rent, you can deduct them as mortgage interest. Payments made to end the ground lease and payments for nonredeemable ground rent aren’t deductible as mortgage interest. 9. Reverse mortgage interest generally isn’t deductible until it’s paid — and you don’t usually pay interest on a reverse mortgage until you (or your heirs) sell your home and pay off the reverse loan. 10. If you own a cooperative apartment, you’ll get a Form 1098 from the co-op telling you how much interest you paid on any building-wide mortgages. You can deduct that amount along with the interest you paid on your individual unit loan (if you got a mortgage to buy your shares in the co-op).