REThink Real Estate
What is more likely to become law are the very minimal tweaks to the MID of the vein the president included in his latest budget proposal, which will affect very few Americans: Single taxpayers earning more than $200,000 and married taxpayers with incomes of more than $250,000 would have a 28 percent cap on their mortgage interest deduction, under the most recent proposal for this coming fiscal year.
It's also likely that the MID could be eliminated on second homes and home equity lines of credit. The long and the short is that no one in Congress wants to be seen as endangering the housing market's recovery, even if they disagree in principle that homeownership should be federally subsidized via the MID.
So, if I were a first-time homeowner of a moderately priced home, like you, I would not be worried. I am a homeowner and am not worried about the MID disappearing anytime soon.
Barney Frank, D-Mass., ranking member of the House Finance Committee, perhaps best articulated the prevailing sentiment on the Hill, even among those who, like himself, disagree with the deduction in principle: "The mortgage interest deduction is going nowhere. The sun will go away before it does.
"Given the extent to which people's legitimate, vested interest include that, trying to abolish it now, even if we were in a wonderful economy, would be unfair. You cannot do it without being disruptive to people. Houses are still a large part of the wealth for many people. I think it's important for people to know that that's staying around and we can build on that," Frank said.
Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.
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