Tax season is in full swing. If you haven’t started already, it is important to get a move on with your taxes. There are several deductions and credits that people overlook every year. And your home mortgage loan could help you save a little money. There are deductions (items that lower your taxable income) and credits (items that count toward “paying” your taxes) associated with your home mortgage loan, and you should take full advantage of them.

• Mortgage interest paid. This is common among mortgage tax deductions. You can deduct the interest you paid on your home mortgage loan. There are online calculators that can help you get a better idea of your tax deduction for mortgage interest paid.
• Private mortgage insurance. The premiums you pay for private mortgage insurance can be deducted this year. This deduction actually goes with your mortgage interest paid deduction on Schedule A.
• Property tax credit. You can get a credit on your federal taxes for the state property taxes that you might have paid.

Don’t forget that there is also temporary relief for taxes on mortgage debt forgiveness. If your mortgage lender has redone your loan terms, or forgiven a portion of your home mortgage loan, you do not have to pay taxes on it this year (or next year).

You can learn more about other tax deductions and credits by visiting the IRS.com Web site or speaking with a knowledgeable tax preparer, accountant or attorney.

Tags: mortgage lenders, property tax credit, home mortgage loan, tax deductions mortgage,
private mortgage insurance, mortgage loan blog, home equity line of credit

The largest mortgage lender in the nation, Countrywide, has been have trouble for quite sometime. Subprime mortgage writedowns have plagued the company, and as the foreclosure rate rises, so do delinquencies on Countrywide home loans. The Motley Fool reports on the bad news for Countrywide:

Last week, the California-based home lender reported a nine-fold jump in delinquencies of at least 90 days in the past year, now totaling 5.4% of its $28.4 billion adjustable-rate mortgage pool. Perhaps more alarming was that 71% of borrowers from that pool chose to make the absolute minimum payment necessary, which doesn’t even cover total interest accrued, thus pushing loan balances higher every month.

Additionally, Countrywide has sustained losses due to home equity lines of credit — to the tune of $704 million in 2007.

But all that will soon be water under the bridge, right? After all, Bank of America has offered to buy Countrywide. But until the deal actually happens, there’s always a chance it will be scuttled. And Bank of America may balk as more mortgage market news, especially concerning Countrywide, rolls in.

If the deal is broken, then it means a very long haul on the road to mortgage market recovery. And those with Countrywide stock could find themselves stuck with large losses. But if it does go through, those who buy Countrywide stock now may be handsomely rewarded.

Disclaimer: I am not an investment professional. Nothing in this piece should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional.

Tags: mortgage loan blog, mortgage market news, home mortgage loan, home equity lines of credit,
Bank of America Countrywide, subprime mortgage writedowns, Countrywide stock news

When asked what constitutes a threat to the US economy, some economists insist that it is subprime mortgage debt, along with other debt. Indeed, with high interest rates, credit card debt is often considered subprime debt. Add this type of debt to subprime mortgage debt, and the amount of subprime debt in in the US is truly troubling. The Guardian reports on the contribution of subprime mortgage debt to US economy troubles:

“NABE members are increasingly concerned over the short-term risks associated with subprime mortgages and other forms of indebtedness, while they continue to cast a wary eye on inflation,” said Ellen Hughes-Cromwick, president of the National Association for Business Economists.

As this debt continues to be a problem, other economic factors are added in. Consider stagflation. Stagflation is creating its own problems as consumers experiencing stagnant growth in buying power are unable to keep up with inflation. As inflation causes prices to rise, money will increasingly be spent on things like gas (oil prices are rising rapidly) and food, reducing the amount of money that can go toward paying down debt.

During a recession (stagflation is often considered a harbinger of recession), having a great deal of debt is a bad idea for individuals. And efforts by government agencies, including Fed rate cuts and mortgage loan rate freezes and other term modifications, don’t seem to be helping at all.

Tags: subprime mortgage debt, subprime mortgage, home mortgage loan, mortgage loan blog,
mortgage loan freeze, stagflation, recession