Know the limits of the mortgage interest deduction

Refinancing may not bring greater tax savings

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The number of homeowners refinancing their home mortgages continues to climb, comprising nearly two-thirds of all home loan applicants.Mortgage interest rates have remained lower than expected as investors have rushed to the security of U.S. Treasury bonds in light of the disaster in Japan and unrest in other areas of the globe.Economists from the Mortgage Bankers Association first forecasted that 30-year fixed-rate mortgage interest rates would reach 5.5 percent in the second quarter this year but recently revised their predictions.They wrote that long-term rates are expected to remain at 5 percent in the second quarter, then rise to 5.3 percent in the third quarter and 5.5 percent in the fourth quarter.Some loan representatives say the recent activity has been led by a group of owners seeking to grab the lowest rates they can before the predicted rise. Those homeowners, however, may not be able to deduct all of their new mortgage interest payments from their federal inc...