"Dream manfully and nobly, and thy dreams shall be prophets."Edward Bulwer-Lytton
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Car Refinance
This article provides useful, detailed information about Car Refinance. Car Refinancing is the process by which someone pays off an existing car loan by borrowing a new loan. On his part, the new lender pays off the old loan on condition that ...
Subprime Hybrid Mortgages
Subprime hybrid mortgages offer temporarily low rates for borrowers while they work to rebuild their credit. With a sub-prime hybrid mortgage, you don't have to pay PMI, saving hundreds a year. After two or three years of on time payments, you can then ...
When to Use Online Lending Services
If you're in the market for a loan but aren't sure where to look in order to get the best deal, you might want to take a moment to consider online lending services. While online lenders aren't always the best choice for all circumstances, you might find ...
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Depending on how you used your home equity loan, there are a number of tax deductions available for your home equity loan interest. The largest deductions are available for home improvements. However, for loans used to consolidate debt or pay for college, you can still deduct interest with some limits. And if you use the loan for investment purposes, you can also deduct interest charges.
Home Equity Loans Used For Home Improvements
Interest on home equity loans used to build or improve a first or second home qualifies for the home acquisition debt deduction. With caps at one million dollars, it has the largest limits. Any debt over this limit may qualify for the home equity debt deduction.
If you take out a home equity loan 90 days after you purchased the home, you can still deduct the interest even if you don't use the money for home repairs. For example, you buy a house May 1 with cash. May 15 you take out a home equity loan for $10,000 and use it to go on vacation. You can still deduct the interest paid since you secured the loan before 90 days after buying the house.
Home Equity Loans Used For Other Expenses
Paid interest on home equity loans used to pay for college, credit card debt, or other expenses qualify for tax deductions under home equity debt. However there are limits on the debt amounts that qualify for this deduction.
The home equity loan amount must be less than $100,000 (or $50,000 if filing separately) or the fair market value of the house minus the acquisition mortgage. The interest on any debt above these amounts, however, may qualify for other tax deductions.
Deductions For Interest That Exceeds Limits
If you find that your home loan debt exceeds mortgage caps, you may still be able to deduct the interest as an investment cost or business expense. Otherwise, excess debt is considered personal debt and non-deductible. But the next year, your home equity debt interest debt may qualify if it meets all requirements. Before taking any tax deduction, verify that IRS rules have not changed in the preceding year.
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