Is a Home Equity Line of Credit Tax Deductible?

Next Video:
How to Keep Adequate Tax Records....5

A home equity line of credit, known as a HELOC, is absolutely tax deductible, as Congress passed an act regarding the deductibility of mortgages. Learn about home equity lines of credit with information from a registered financial consultant in this free video on personal finance.

Part of the Video Series: Personal Financial Advice
Promoted By Zergnet


Video Transcript

This is financial adviser Patrick Munro answering the question: Is a home equity line of credit tax deductible? A HELOC, or home equity line of credit, is absolutely tax deductible because of Congress' act on mortgages and the deductibility of mortgage. A home equity line of credit is really a second mortgage position from the principal mortgage position, and you have significant equity in your home, you can take a portion of it out for the purposes of spending it on a worthy endeavor such as college education, buying a second residence, perhaps a vacation -- things of that nature -- or just to have an outside credit line for you. Whatever your payment is over the course of that mortgage is tax deductible so that at the end of the year, you'll receive a form and you can use that to your benefit to lower your existing income taxes. That's the only type of debt that really is good debt because it does trigger a tax deductibility. Any mortgage debt does. This is Patrick Munro, financial adviser, answering the question: Is a home equity line of credit tax deductible?


Related Searches

Is DIY in your DNA? Become part of our maker community.
Submit Your Work!