Are Home Equity Lines of Credit Tax Deductible?
Usually, if a person uses a home equity loan for debt consolidation, home improvements or to pay for tuition, the interest is fully tax deductible. Discover why it's important to talk to a tax adviser about home equity lines of credit with help from a financial specialist in this free video on home loans and money management.
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Hi, now that you've secured your home equity line of credit, you may be wondering to yourself if I use the funds off this loan, are there any tax ramifications? Hi, my name is Matt McKillen, I'm with Innovative Financial Group. The question today are home equity lines tax deductible? I always advise that any client that's got tax questions about interest paid on a mortgage, they should always definitely speak with their tax adviser first because circumstances can vary based on the client. Traditionally if you use the processed of a home equity loan, either for debt consolidation and that can be used for either high rate credit cards or personal loans or even automobile loans, or if the proceeds of your home equity loan are also used let's say to do home improvements, maybe put in a swimming pool or replace a roof or put in an addition on the home and in other circumstances, a lot of times people will use the home equity loan for educational expenses. It might be for paying off student loans or paying tuition. Generally under all of these circumstances, the interest is 100% fully deductible on your income taxes. Again, I always advise that you do talk to your financial planner or tax preparer to verify that this will fit your individual situation. Thanks again, my name is Matt McKillen, I'm with Innovative Financial Group.