Tax Deductibility (of Interest And Points)
Definition of "Tax Deductibility (of Interest and Points)"
The provision of the U.S. tax code that allows homeowners to deduct mortgage interest payments from income before computing taxes. Points and origination fees are also deductible, but not lender fees expressed in dollars or any other settlement costs. Interest deductibility is politically untouchable in the U.S., although it is often criticized by economists and is found in few other countries. Interest deductibility enters a number of decisions made by homeowners or purchasers, sometimes when it shouldn't.
Popular Mortgage Terms
Protection for a borrower against the danger that rates will rise between the time the borrower applies for a loan and the time the loan closes. Rate protection can take the form of a ...
The specific interest rate series to which the interest rate on an ARM is tied, such as 'Treasury Constant Maturities, One-Year,' or 'Eleventh District Cost of Funds.' ...
A rate lock, plus an option to reduce the rate if market interest rates decline during the lock period. ...
The most recently published value of the index used to adjust the interest rate on an indexed ARM. ...
The longest period for which the lender will lock the rate and points on any program. On most programs, the longest lock period is 90 days; some go to 120 days and a few to 180 days. It ...
Programs offered by some lenders under which a borrower who is able to secure a grant or gift equal to 2% of the down payment will only have to provide a 3% down payment from their own ...
The frequency of rate adjustments on an ARM after the initial rate period is over. The rate adjustment period is sometimes but not always the same as the initial rate period. As an example, ...
Fixed rate Mortgage is a type of loan that maintains a specified interest rate for the lifetime (or maturity) of the mortgage.According to the Federal National Mortgage Association, ...
Interest that is earned but not paid, adding to the amount owed. For example, if the monthly interest due on a loan is $600 and the borrower pays only $500, $100 is added to the amount owed ...
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