While a home mortgage may not exactly be an investment, it can have certain benefits. Indeed, most people cite the home mortgage for some of its tax benefits, many of them deriving from deductions related to interest. Here are some of the tax benefits that come with a home mortgage:

1. Interest paid. When you make mortgage payments, a large portion of that each month goes to interest, especially at the beginning of the home loan. You can deduct a portion of that mortgage interest on your tax form.
2. Mortgage points. Sometimes, you can pay points to get a reduction in the interest rate that you pay. In addition to mortgage interest being tax deductible, you can get some tax advantage for points.
3. Home improvement. When you take out a home equity loan, for home improvement or otherwise, you are getting a second mortgage. This can mean that the loans you take out to improve your home, as long as they are based on the equity in your home, may be tax deductible.
4. Mortgage tax credit. In addition to home mortgage tax deductions, there is a mortgage tax credit that you can use in some cases.

Before taking any of these tax benefits from your home mortgage, however, it might be a good idea to check the IRS Web site to ensure that you do things properly. You may also consult with a knowledgeable tax attorney or accountant.

Tags: home equity loan, home mortgage tax benefits, home mortgage loan, home loan,
second mortgage, mortgage interest, mortgage blog

The holiday season brings with it more than just presents and cheer. For many of us, it also means increased debt. Dealing with debt is what prompts many to make New Year’s Resolutions of getting their personal finances in order. CNN Money has some great tips on dealing with holiday season debt. And one of the tips for dealing with debt happens to be to stop spending money your credit cards:

The next step may seem obvious, but a lot of people don’t take it, and that’s to stop charging on your credit cards. If you don’t do that, Reed said, “the bills will only get larger and the envelopes heavier and the stress greater.”

One of the problems we have is that it is so easy to just put purchases on a credit card. It’s convenient, easy and we don’t actually “see” the money go. And if you can’t pay the balance off, it’s easy to just pay the minimum and move on with the month. And this is what gets many in their personal finances. Paying only the minimum ensures that you are in debt for a looooooong time.

Some of the things you can do to help when dealing with credit card debt includes:

1. Trying to negotiate a lower credit card interest rate.
2. Put extra money toward one credit card at a time. Concentrate on paying off one (keep paying all minimums though) and then move on to the next.
3. Avoid putting more money on your credit cards.
4. Create a holiday fund. Save money all year to use on gifts during the holiday season.

You can get out from under that holiday season debt. But it means that you truly have to start the new year off right.

Tags: holiday season debt, dealing with debt, home mortgage loan, mortgage blog,
get out of debt, credit card interest rate

One of the biggest stories of 2007 was the subprime lending crash. And, for now, it appears that mortgage lenders are changing their shoddy lending practices. The Boston Globe is reporting that subprime lending has dropped dramatically since the crash:

Lenders sold about $26.3 billion of subprime loans in the third quarter of 2007, down more than 80 percent from the roughly $139 billion sold at the peak of the boom in the fourth quarter of 2005, according to Standard & Poor’s.

Of course, this doesn’t mean that the mortgage crisis is over. Many people are still going to be affected by the subprime lending crash. Whether it will be harder to get a home mortgage loan going forward, or whether they will, in fact, find themselves in foreclosure due to a re-setting ARM, the subprime lending crash has not ended the problems that are surfacing from the era of easy credit.

Indeed, the fact of the matter is that many of the “fixes” offered toward the end of 2007 will do nothing of the sort when it comes to solving the underlying problems of our mortgage industry and how business is done. In fact, even though the subprime lending industry may have all but disappeared for now, I’d be very much surprised if it doesn’t make a comeback. The excuse that you can charge very high rates to those with questionable credit is just too potentially money-making to pass up.

With the subprime lending industry likely to return, the Boston Globe points out that states need to figure out how to regulate subprime loans. After all, the measures put into effect recently don’t completely solve the problem of people who should not be getting loans in the first place being approved, although the Fed’s modification of Reg. Z does address the problem to some extent.

Tags: home mortgage loans, mortgage blog, home mortgage, mortgage lenders,
subprime lending industry, mortgage crisis, lending industry