1. Mortgage Interest Deduction
The changes to the Mortgage Interest Deduction affect mortgages in excess of $750,000 (for married taxpayers filing a joint return). For married individuals filing separately, the limit is $375,000. To the extent your mortgage amount is $750,000 (or $375,000) or less, you are still able to deduct your mortgage interest on your Federal Income Tax Return.
2. State and Local Tax Deduction
The Tax Cuts and Jobs Act limits the deduction for the total of state and local property, income or sales taxes. Florida does not impose a personal income tax. So, property and sales taxes up to $10,000 are still allowed as a deduction.
3. More Home for Your Money
Interest rates are still low. Last month in Palm Beach Count the median sold price of a single family house was $299,000. Assuming a buyer pays a deposit of 10% or $29,900 and has an interest rate of 4%, the monthly payment would be about $1,800 (with PMI). Often the rent for a comparable single family home is higher than the mortgage payment.
4. Building Equity
A rental payment allows you to live in your house or apartment for a specified period of time. There is no other benefit for you. A rental
payment will not help your credit score. It will not produce equity for you. A mortgage payment also allows you to continue living in your home. However, it also builds equity. Every payment has a component that will reduce the principal of your mortgage, in effect, building equity. Plus, by making mortgage payments, you are strengthening your credit score.
5. Real Estate as an Investment
As shown in the graphic below, the inventory of active listings in Palm Beach County is low, while the average sale price is trending up. This is expected to continue into 2018. The cost of waiting to buy could be significant!
