Mortgage Relief Extended for 2013

A few laws benefiting home owners and borrowers have been extended through December 31, 2013.

First of all, the Mortgage Debt Relief Act of 2007 expired on Decembr 31, 2012.  On New Year’s Day, however, lawmakers extended the act through 2013.  This is good news if you are going through a short sale.  Typically, any debt that is forgiven during the course of a short sale is taxable income to the homeowner who’s debt is forgiven.  But pursuant to the Mortgage Debt Relief Act, such debt is not taxable. 

Second, mortgage insurance premiums will remain deductible, as they were in the past, as a result of the recent “fiscal cliff” laws.  These deductions allow a sizeable savings for homeowners who pay mortgage insurance, so long as their income is less than $110,000 annually

Third, in 2012, homeowners who made energy-efficient improvements were allowed to take a $500 tax credit if they met certain criteria. This has also been extended through 2013.