I am thinking of getting a home equity loan to pay off our credit card debt. We own our home free and clear. Will there be any taxes on this...I am not a very financial person so any advice would be great!!
2006-08-09 16:59:22 · 5 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
No. Actually, you are well off, because you can get a new first mortgage if you wish, and the interest rate on that will be better than on an equity loan. But the equity loan may have the advantage that you can repay, re-borrow, and re-repay when you wish, which first mortgage loans generally do not allow. Talk to your local banker and see what he says; mine has been very helpful.
The only tax issue that could ever arise is if you sell the house and owe more on it than you originally paid for it. This is called "mortgage over basis" and you need to talk to a tax expert if this becomes an issue.
2006-08-09 17:07:55 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Interest on a home equity loan is usually tax deductible if you itemize. Depending on how much the interest is and how many other deductions you have, this could work to your advantage.
2006-08-09 17:21:31 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
From what i do know, "no" there will be no taxes for the loan itself. Any taxes and interest are deductible to you when filing taxes for the year.
2006-08-09 17:18:33 · answer #3 · answered by barbra w 1 · 0⤊ 0⤋
A loan is not income, because it's a liability, and therefore not a "taxable event". But you can deduct the interest.
2006-08-09 19:40:59 · answer #4 · answered by Me-as-a-Tree 3 · 0⤊ 0⤋
Even if there is any Tax,you can always write it off at the end of the year.
2006-08-09 17:06:04 · answer #5 · answered by Joe P 4 · 0⤊ 0⤋