MEW is the sound of the IRS going after your wallet
Many homeowners have taken money out of their homes in recent years as if their home was an ATM machine. MEW means mortgage equity withdrawal. The fine print in the tax deductibility of refinancing interest has probably been overlooked by almost everyone except for the Internal Revenue Service. There are rules, some interest is deductible, some isn't.
We had an interesting conversation about this very point during a recent continuing education class I took with Steve Harvey, a real estate attorney and real estate investor in South Carolina. Since 99% of most homeowners who have taken equity out of their homes have done so without regard to the IRS rules and the consequences of their actions, it is important to at least alert you to the potential tax consequences. People have been taking advantage of this extra write off for years unaware of the potential problem they may encounter.
No one could explain it better than one of the finest mortgage brokers in the country, Brian Brady, writing at the Bloodhound Blog. If you have taken equity out of your home in the past, you must read, Pay the loan down and refinance later? The IRS is out to getcha!
As Brian says, "Pick the right Realtor, mortgage professional, and CPA when buying a home. If you thought dealing with a professional was expensive, wait until you find out how much dealing with an amateur costs."