Impact of GOP tax bill on an in-process refi

OCtoSV

Active member
Has anyone figured out from sec 1302 of the GOP tax bill whether an in process mortgage refi (no cash out) that was started prior to 11/2 but closes after 11/2 would be treated as debt acquisition prior to 11/2, and thus eligible to be grandfathered in for the $1M mortgage interest deductability limit?
 
Depending on your rate lock, wait it out. All news on this subject is speculative at best.

With the election results yesterday pushing to the Left, most of the GOP'ers are going to skitter like roaches away from anything controversial. The odds of anything passing were slim already, and anything passing of substance like MID changes even slimmer.

My .02c

SGIP
 
Soylent Green Is People said:
Depending on your rate lock, wait it out. All news on this subject is speculative at best.

With the election results yesterday pushing to the Left, most of the GOP'ers are going to skitter like roaches away from anything controversial. The odds of anything passing were slim already, and anything passing of substance like MID changes even slimmer.

My .02c

SGIP

I've been telling my clients...the first thing that they'll revise on the tax bill will be the MID deduction.  The Realtor and Home Builder Associations pack a lot of lobbying muscle.
 
Thanks everyone for weighing in. Closing is scheduled for 11/20. Definitely keeping an eye on the daily debate.
 
The tax bill timeline will not be impacted by yesterday's election. In fact this will make passing a tax bill even more likely as the GOP-ers are in full on panic mode fearing donors cutting them off for next years election if nothing gets done. 

@RepChrisCollins (R-NY) on tax reform: "My donors are basically saying, 'Get it done or don?t ever call me again.'"  7:16 AM - Nov 7, 2017

One positive angle, at least from our perspective n CA is, maybe the House bill is watered down to basically just be a straight up corporate tax cut as opposed to all the elaborate shenanigans they have now -- like SALT, MID etc.  But the Senate may have a whole different plan altogether. 

This party is super intent on soaking the top 10% to really take care of the top 0.01% -- estate tax exemption progressive expansion, no impact whatsoever on private equity carry interest ( which really only benefits the carl Icahn types) , etc. -- they can worry about focusing solely on donors hoping that the MAGA fans are stupid enough to keep voting for them against their own interests. 
 
fortune11 said:
This party is super intent on soaking the top 10% to really take care of the top 0.01% -- estate tax exemption progressive expansion, no impact whatsoever on private equity carry interest ( which really only benefits the carl Icahn types) , etc. -- they can worry about focusing solely on donors hoping that the MAGA fans are stupid enough to keep voting for them against their own interests.

I read that the tax plan benefits people who makes $500k/yr household AGI while disadvantaging households in the $100k-$500k range.

What are the income cutoffs for 10% and 1%? Apparently the cutoff for 10% is $133k. And the cutoff for 1% is $465k/yr.https://www.investopedia.com/news/how-much-income-puts-you-top-1-5-10/
 
No one really knows what happens in the end. I always think it's completely unfair to wait till the end of the year to change tax deductions which makes it hard for us to game the system. LOL!

The senate version keeps the MID as is but completely eliminate SALT.

I guess that is a benefit to those who have a million dollar mortgage. Should be a bigger deduction than the $10000 property tax deduction but it makes non mello homes all the more appealing down the road.
http://www.businessinsider.com/trump-gop-tax-reform-senate-bill-text-details-rate-2017-11
 
OCtoSV said:
Has anyone figured out from sec 1302 of the GOP tax bill whether an in process mortgage refi (no cash out) that was started prior to 11/2 but closes after 11/2 would be treated as debt acquisition prior to 11/2, and thus eligible to be grandfathered in for the $1M mortgage interest deductability limit?

The way it's written now in the House bill, if the borrowers entered into a "written binding contract" of a purchase before 11/2, and still closed before 4/1/2018, then it is grandfathered in. A refi can be grandfathered in only when the new principal balance of the refi does not exceed the unpaid principal balance of the prior loan (and the prior loan closed before 11/2, and the original maturity date was before 11/2).

This is all very speculative, though. Anything can happen at this point.
 
Yup, I've heard arguments both ways. Depends on whether the recipients place it back into the market, but on the other hand, many aren't getting it, it's relatively small, a limited time-frame and a lot of peeps are sitting on the sideline waiting to see how it affects the market as a whole before jumping in. Unfortunately, it's still up in the air. Plenty of debate, but too early to tell. =\
 
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