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Home Equity Lines of Credit

Posted by Admin Posted on Apr 30 2018

Home Equity Lines of Credit – this once reliable source of financing may not be as useful under the new tax law.  Beginning in 2018 the use of the funds determines the deductibility of the interest payments paid on lines of credit using your home or your 2nd home as the collateral for securing the loan.  The new law only allows the tax deduction of interest expense when the loan is taken out to “buy or improve” a primary or secondary home, not for the refinancing of personal loans such as credit cards, vehicle or student loans, etc.  Therefore, while securing a home equity line of credit may still make sense for you in terms of ease of approval and general loan terms, just keep in mind that the interest expense paid on this type of line of credit may not be deductible, depending on the underlying use of the proceeds.  Mike and Staff