About Home Equity Loans & Taxes

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About Home Equity Loans....5

Home equity loans and mortgage payments are all considered tax deductible, which is why many home owners find equity loans so desirable. Get a 100 percent tax deduction on home equity loan interest with information from a mortgage broker in this free video on home equity loans.

Part of the Video Series: Home Equity Loans & Foreclosures
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Video Transcript

Hi, this is Matt McKillen with Innovative Financial Group. The question posed to me today is, How do home equity loans relate to your taxes or your income taxes? First off, the interest that you're paying on your first mortgage, that's usually the loan that you took to purchase your home, is a hundred percent deductible if it's your primary residence. On second mortgages or home equity lines of credit, which are considered home equity loans, the majority of the time that interest is also one hundred percent deductible. That's why people find it so appealing to take the money they would use to maybe consolidate credit card debts, pay off personal automobile loans, all of those type of consumer credit accounts are not tax deductible; whereas if you do consolidate with a home equity loan and pay those all off, usually the interest rate is much less. You could spread the term of your payment out longer and then the benefit also is that the interest is usually one hundred percent tax deductible. Just like the interest you pay on your first mortgage, if the home equity loan is used for tuition or for schooling or for home improvements, nine times out of ten the interest will be deductible also. I always recommend that you talk to your personal accountant or CPA just to verify based on your circumstances. Again, my name is Matt McKillen and I'm with Innovative Financial Group.

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