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5 wise money moves before the Fed starts raising interest rates to fight inflation

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One potentially costly tax issue that many people don’t consider when refinancing their mortgage

One possible tax impact people often don’t consider is that a large drop in your interest rate could also result in a large drop in tax-deductible interest, says Denny Ceizyk, senior staff writer at LendingTree: “This could leave you with a higher federal tax bill come tax season,” says Ceizyk. You may be able to deduct points from your taxes (you buy points in order to get a lower interest rate), though these are typically deducted over the duration of the loan, so you’d deduct a portion of them each year. The mortgage interest deduction — a tax incentive for homeowners — used to allow homeowners who itemize to deduct mortgage interest paid on $1 million worth of principal per couple, but now it is on just $750,000.

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