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					                      CentreCounty Association
                       of REALTORS®
      Why Interest homes
  Mortgagedo some Deduction
Pays Dividends for Home Owners
   sell quickly and not others
A
T
             title      this
       helthough of recent                            shine and is The deduction is available for
                                                      to $1 million. too full of stuff and personal
                     one of
       article is of plans
         reports                                      items, on mortgages for a principal residence
                                                      interestchances are someone else’s home will
       the common ques-
         to eliminate or                              show one additional property. Individuals
                                                      and better.
tions that REALTORS®
            the mortgage
modify from their clients
receive                                               claiming the MID also must itemize their taxes.
interest deduction are
or friends in everyday                                    Location—most people are well aware of
widely exaggerated, no
conversation. There is the                                the importance of the interest paid one
                                                      The ability to deductthis factor, but thison a
National Associationmeof
simple answer but let                                 feature doesn’t trump def iciencies in the f irst
                                                      mortgage can translate into significant savings
provide my viewpoint on
Realtors® will remain                                 two factors. When REALTORS® assist buyers,
                                                      at tax time. For example, a family who bought
this               question.
actively    engaged       to Jerry Wettstone
                               Steven Bodner          we remind them that where and what 30-year,
                                                      a home this year with a $200,000, they buy
ensure–that the nation’s 75
Price This is the most
                              President CCAR
                              President CCAR          always needs to be considered in an interest
                                                      fixed-rate mortgage, assumingthe context of
million home owners the list of factors. There
important variable in will                            how of 4.5 a range of buyers it nearly $3,500
                                                      rate broad percent, could save will appeal to
continue to receive this important benefit.your
is no magic price for any home, but                   when they need to          they file residence.
                                                      in federal taxes whensell their next year.
REALTOR®        can    provide       you   with   a   Consider the health of the neighborhood, the
Comparative Reduction Commission has
The Deficit Market Analysis (CMA) of actual           proximity to the places of employment par-
                                                      Accordingto majormost recent IRS tax return
comparable home sales, to help you toward
released its recommendations arrive at
an informed list price. This price must take
                                                      ticularly with 65 percent in transportation
                                                      data available, the increase of families who
reducing the U.S. deficit, which include              costs, the MID earn environmental or phys-
                                                      claim and any limitingless than $100,000 per
into consideration all of popular tax breaks,
modifying a numberthe other factors that fol-
low. No one wants to give their home away             ical features. Incidentally, town homes percent
                                                      year. “Home owners already pay 80 contin-
            the price, but interest my sellers
includinglow a mortgage I remind deduction.
with too                                              ue to percent of resale value particularly
                                                      to 90 enjoy strongU.S. federal income tax,
that during the f irst few weeks 18-member,
President Obama created theyou are on the             because their price appeals to manythe MID,
                                                      and among those who claim f irst-time
bipartisan commission earlier thistoyear to
market you have the greatest chance     receive       home buyers.
                                                      almost two-thirds are middle-income
identify ways to balance the budget by 2015.
your best offer. Don’t overlook an offer that is
                                                      earners,” said NAR’s Chief Economist
within 2-3 percent not have asking price,
The commission does of your any legislative           Market timing “If the tax sell all modified
                                                      Lawrence Yun. – properties break isyear long,
because and Centre County Association of
power, if your home doesn’t go under agree-
ment in a month or so, you’ll need to seriously       but the greatest number usually sell in 15
                                                      or eliminated, home values could fall the
Realtorsreducing thethe commission’smuch or
           says that list price by that report
consider                                              months nationwide, as August. Our largest
                                                      percent of March throughbuyers discount the
          a first step admonition is, “Price it
is justInthenutshell, the of a lengthy process.
more.                                                 employer, Penn State, their purchase offers.”
                                                      value of the MID in usually makes offers to
right          the          f irst          time”.    new candidates around March for the fall
“Now that the report has been published,
Condition – this is an increasingly popular
                                                      semester. Those renting saves the to buy
                                                      CCAR said the MID and wanting average
it is reviewed by members of Congress                 their    owner usually have dollars at
                                                      home f irst home thousands of leases ending
topic for discussion and topic incorporate
who will decide if they want toon television          around the end of July. Families with growing
shows. The word “staging” is often used and           tax time and helps American home
                               into training to
any recommendations special legislation,
individuals are receiving                             families get                     a larger home
                                                      buyers that need to move up to first house.
                                                                       into their
provide they are not required to do so,” said
althoughconsultation help to home sellers. If         want to close before school starts. . If you are
Steven Bodner, 2010 President of CCAR.
the optimum time for a top offer is in the f irst     placing a home on the market       this home
                                                      “In today’s market, eight outatof 10time of
few weeks the important to make a discussion
“If alteringit is MID ever becomessure it shows               is even more important to a home,”
                                                      year it must borrow money to buymake sure
                                                      buyers
at its in Congress, goesRealtor® community
point best when it the on. Most of us have            price and condition aspiring home
                                                      said Bodner. “Forare at their best. owners
procrastinated
stands ready toon repairs and updates on our
                   defend it. The MID is both a
homes, and over time our homes have a knack   who don’t have hundreds of thousands of
of getting full of “stuff home ownership and
powerful incentive for”. Your home for sale isSpace in savings to buy a home outright, tax
                                              dollarslimitations do not permit a more exhaus-
a product on the provisions in the tax code.”
one of the simplestmarket in competition with tive discussion of this issue interest deduction
                                              benefits like the mortgage but hopefully these
other homes and you can bet that buyers are points will assist some of your whether you are
                                              help them begin building their future through
doing competitive an individual to deduct
The MID allows shopping before deciding sellers or buyers.
which property to buy. If your home doesn’t home ownership.”
mortgage interest paid on mortgage debt of up

				
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posted:9/7/2011
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