The tax law effect on your mortgage
The tax laws that were enacted in 2017 have changed the tax benefits of many homeowners; a maximum limit of state and local taxes was set at $10,000, and the standard deduction was increased to $12,000 for single filers and $24,000 for people married and filing jointly. Now in the beginning of 2020, it is a great time to review your tax benefits and re-evaluate whether taking the standard deduction is better than itemizing deductions.
It’s more than money
Our homes aren’t just assets for us to sell at the right time. They’re places where memories are created, and where your children grow up. Consequently, many people want their mortgage to be completely paid off by retirement, which helps your pension and savings go further without the extra monthly payments. Do you plan to sell your home soon or keep it through retirement? Either way take the time to examine the best mortgage strategy for your future plans.
On the financial side
Disregarding the emotional attachments we may have towards our homes, it still is an investment. Putting an extra 1,000 or 2,000 dollars in your monthly payment can help greatly. However, when doing so, it’s helpful to think about your future needs for the money, and also acknowledge that your house may not increase in value after you pay it off, placing you in a very difficult position.
The correct decision
Everyone is in a different situation. While the idea of a completely paid off mortgage may seem alluring, it should be weighed against what the extra money can be used for before making the decision, such as investments or an emergency fund. Lastly, keep in mind the tax benefits you may have with and without a mortgage.
These are the things I help my clients with every day. Call me and we can go over your plans for 2020 and beyond and make sure your mortgage is providing you with the maximum benefit.
