Commentary Mortgage Tax Reform - Print

Q. ARE THERE OTHER FINANCING OPTIONS AVAILABLE THAT I SHOULD CONSIDER? A. Homeowners may look for other sources to fund borrowing needs such as personal loans or securities- backed loans. Some borrowers may be able to utilize a line of credit linked to their taxable investments. These interest rates are typically even lower than a traditional home equity line of credit. Q. CAN I REFINANCE MY EXISTING $1 MILLION MORTGAGE THIS YEAR WITHOUT LOSING THE FULL DEDUCTIBILITY OF INTEREST? A. Yes, homeowners with existing mortgages that were incurred before December 15, 2017 can refinance and still maintain the deductibility up to the prior limit of $1 million. This does not apply to cash out refinancing. For example, someone cannot refinance a mortgage with a balance of $500,000 with a new loan of $700,000 and be able to fully deduct the interest. Only interest associated with the $500,000 balance will be deductible. Q. WHO SHOULD I CONTACT TO EVALUATE MY OPTIONS? A. You can certainly contact your Commerce relationship manager to start the conversation on how the new rules may impact your situation. It is important to contact your tax advisor to review all available options for borrowing before making a decision. This topic is very complex and the IRS has not yet issued a complete set of guidelines. If you would like to discuss your financial planning options with a Commerce Trust financial planner, just email Andy Hoffman at andy.hoffman@commercebank.com, or call this toll-free number, 800- 892-7100, ext 1-7329.

1 CNBC News, Reality Check, Oct. 24, 2017

*Always consult with your CPA and professional advisor on matters involving income taxes. Past performance is no guarantee of future results, and the opinions and other information in the commentary are as of January 17, 2018. This summary is intended to provide general information only and is reflective of the opinions of Commerce Trust Company. This material is not a recommendation of any particular security, is not based on any particular financial situation or need, and is not intended to replace the advice of a qualified attorney, tax advisor or investment professional. Diversification does not guarantee a profit or protect against all risk. Commerce does not provide tax advice or legal advice to customers. Consult a tax specialist regarding tax implications related to any product and specific financial situation. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed. Commerce Trust Company is a division of Commerce Bank.

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