James Melton, top 5% of all Realtors (source Trulia 2013)
Realtor & Mortgage Broker, CA DRE Broker #01222353, NMLS #300133
President, Victory Mortgage & Real Estate Home Loans & Sales Since 1979, NMLS #366399
2901 W. PCH, Suite 200, Newport Beach, CA 92663
cell(714)318-4664, phone(949)939-9676 or (714)374-0022, fax(714)844-9094
The availability of the mortgage interest deduction makes it possible for taxpayers to itemize other deductions (property taxes, state income taxes, medical expenses, etc.) for which it would not make sense for the taxpayer to deduct when compared to the standard deduction.
However, should one of my clients be in a position to pay off their mortgage and asks me for my opinion on whether or not it makes sense to continue using the mortgage interest deduction or pay off the mortgage, I will almost always suggest they pay off their mortgage. To use a simple mathematical equation, if you are in the 30% tax bracket and can deduct $10,000 in mortgage interest, you are saving $3,000 in taxes. To put that into perspective, you are paying your lender $7,000. If you pay off your mortgage, you are no longer paying the $10,000 in interest but will be paying the $3,000 in taxes. Therefore, you will be saving the $7,000 difference between interest payments and "saved" taxes.
Tim Kunze, RealtorÂ®
Focusing on ... YOU!!!