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No home mortgage interest deduction? No problem!

You may have heard by now that one of the ideas floating around to reduce the Federal deficit is to eliminate the popular home mortgage interest deduction.

While politicians argue this point (this may go on forever), what should a typical middle class American do? Should you own or buy a home even when the home mortgage interest deduction may be eliminated?

This is a “No Brainer”. Buying is your best option and here is why:

When you rent, you are paying the landlord enough money to cover the mortgage and a profit which may range from as little as 5% to as much as 25%. This is why a 4-bedroom home in Overland Park rents for $1.500 to $2,000 or more. The rent payment does not include the “Renter’s Insurance policy you still have to purchase to cover your personal property, and when you move, your equity is $0.00. Is this what you call a good deal?

Buying a home today is a great investment, even if the deduction for your home mortgage interest goes away, which it may never happen after all is said and done. A $160,000 mortgage on that same $200,000 Overland Park home at a 5% interest rate will require you to invest $1,150 to $1,250 per month (this includes insurance and taxes). That alone represents a savings of $4,200 to $10,200 per year.

Why help your landlord build equity in the home you live when you could be saving money and building equity in your home. Even if the deduction goes away, you are still way ahead!

Learn about why it pays to be a homeowner before you sign another lease with your landlord!

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Sean Roque

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