Pursuing a home improvement and Second mortgage loan .
I'm interested in pursuing a home improvement and/or second mortgage
loan so I can begin repairing our 30 year old home. How does one go
about pursuing these loans? I would like advise on which types of
loans are tax deductible and which ones are not. I would like to role
my unsecured debt into the loan for tax breaks. Any and all advise
appreciated.
Generally, mortgage interest is deductible if the loan is secured by your
home via a lien, and the combined principal of the loans is less than or
equal to the fair market value of your home. IOW, if you got one of the
"125%" loans, interest on the principal amount that is above the home's
fair market value may not be deductible.
Also, interest on loan proceeds used to purchase securities that
yield tax free income is not deductible.
Call 1-800-TAX-FORM and ask for your free Pub. 17, and Pub. 936,
which will yield more info. You can also download them from
http://www.irs.ustreas.gov/prod/forms_pubs/index.html.
This isn't tax advice unless you agreed to pay for it!