What would happen is congress elimated the Mortgage Interest Dedcution?

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What would happen is congress elimated the Mortgage Interest Dedcution?

2010 Dec 6, 12:13am 12,164 views 28 comments

http://homebuying.about.com/b/2010/11/24/congress-talks-about-eliminating-mortgage-interest-deduction.htm

If tomorrow congress eliminated the mortgage interest deduction tax write off, I predict there would be a HUGE increase in the number of foreclosures. Why? Well look at it there way, say your paying 20k in Mortgage interest a year, and you can no longer write that amount off in your taxes, that means that you will have an additional 20k of income that will be taxed, that's about $6,000 you have to cough up every year. That's enough to push many American's just barely making there payments over the edge. If they are going to eliminate the mortgage interest deduction, they should do in a phased approach, maybe over 5 years, to give people time to adjust there budgets to account for the additional taxes they will be paying.

#housing

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26 Tude @ 2010 Dec 10, 2:04am

TechGromit says

According to the article above they are talking about lowering the max deduction to 500k from 1 million, which would be fine and good for most of the county, but places like California would suffer the most, since most houses are over 600k to begin with.

This is simply not true. MOST houses in California are nowhere near 600k. There are a few pockets where the median is even close to 600k. At this point one could easily find a 2000sf home in the Bay Area in a decent middle class neighborhood for considerably less than 600k. Since the market crash it would only effect people in areas that can afford it. If you ability to survive means you NEED that deduction between 500k-1MIL, you are in too expensive a house and need to reduce your lifestyle a bit.