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
A term that small lenders sometimes use to distinguish themselves from mortgage brokers. ...
The dollar amount of interest paid each month. The interest payment is the same as interest due so long as the scheduled mortgage payment is equal to or greater than the interest due. ...
Often referred to as a “second mortgage”, a home equity loan is a type of loan where the borrower disposes to the lender its equity to the home as collateral. To ...
A borrower who does not meet the underwriting requirements of mainstream lenders. Sub-prime borrowers pay more than prime borrowers and are sometimes taken advantage of. ...
One of many interest rate indexes used to determine interest rate adjustments on an adjustable rate mortgage. ...
On an ARM, the assumption that the value of the index to which the interest rate is tied does not change from its initial level. ...
The highest rate possible under an ARM contract; same as 'lifetime cap.' It is often expressed as a specified number of percentage points above the initial interest rate. ...
An upfront cash payment required by the lender as part of the charge for the loan, expressed as a percent of the loan amount; e.g., '3 points' means a charge equal to 3% of the loan ...
A documentation requirement where the applicant's income is not disclosed. ...
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