Home Equity Interest Deduction Question
I have a question regarding tax deduction related to home equity loan.
Please accept my apology if the question is too elementary. One of
my local banks is offering a home equity loan in a very favorable term
that can be used to pay off mortgage. My current outstanding mortgage
is about 70% of the equity of my home. My question is if I accept the
offer, will I be able to deduct the interest on the home equity line
of credit in my taxes in the same way I currently deduct the interest
on the mortgage? Is there any downside in replacing a standard
mortgage by a home equity loan?
-Wrong. You don't have equity in the amount that you owe. Your equity is
generally the value that YOU have AFTER liabilities. Your first problem is that
you don't have a proper, working definition of what equity is.
There is no downside here: The