It used to be that few banks were offering any home refinancing in Springfield IL, not in the recent past anyway. Now that trend has swung the other way and banks are happily lending in home loans in solid communities such as Springfield IL again. This is terrific financial news for homeowners in the area.
It used to be that high rates of interest paid to creditor banks on credit cards were tax deductible, but those advantages have long since disappeared. As it is now homeowners are only allowed to deduct interest payments on mortgage loans on their personal income tax. In fact in most households this is the largest of all deductions taken on one’s tax returns. For homeowners who may have installment debt such as two car notes, it doesn’t make financial sense to keep car notes. The reason being if you were to do home refinancing in Springfield IL to incorporate these larger installment loans into the mortgage, the interest paid on that portion then becomes tax deductible. This can be a tremendous savings to individual homeowners come tax time. Why continue to pay non-tax deductible interest on car loans when you can incorporate them into the refinance and get a tax deduction at the same time?
The other benefit in regards to tax deductions related to home refinancing in Springfield IL is any discount or origination fees paid to the lender to reduce your interest rate. This may seem like your paying too high of a closing cost when looked at it standing alone, however, it’s the tax benefit to keep in mind. That 1 or 2% of the total loan amount paid up front is fully tax deductible so it’s like getting the money back at tax time, and it simultaneously reduces the interest you will pay on the loan for the entire term. For a savings of $8-$10 per $1,000 dollars loan amount per .125% rate reduction, even over the first few years the origination or discount fees will be made up and recouped. What’s more is that over the life of your loan it will save you tens of thousands of dollars.
There are many tax advantages to doing a home refinancing in Springfield IL right now. Speak with your accountant or tax advisors and you will quickly see that home refinancing to incorporate non-deductible loan amounts can only work in your financial favor. Let the experts at Diamond Residential Mortgage Corp show you how you can save yourself tens of thousands of dollars over the life of your mortgage. Call them today for a free consultation.
