What tax deductions are available to me? Will this be treated as a purchase or refinance? Thank you.
2007-09-11 04:44:11 · 9 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
It will be treated as a refinance. The mortgage interest you pay will be deductible on Schedule A - Itemized deductions along with any points that you pay for a mortgage, but you will have to itemize to get any benefit out of the mortgage interest.
2007-09-11 05:35:08 · answer #1 · answered by Anonymous · 0⤊ 0⤋
This would be a refinance. You can have a new loan up to $100,000 without worrying about what the money is used for. Interest would be deductible as mortgage interest but it would not be deductible in arriving at alternative minimum taxable income.
A loan obtained to purchase or make inprovements to a primary residence is mortgage interest deductible against regular tax and alt in tax.
If you obtain a loan for home improvement and for paying other bills treat the portion used for improvements as a regular mortgage and the part to pay other bills as deductible against regular tax only. Keep the amount of the loan for other bills at less than $100,000 or you could lose some of the interest deduction.
Good Luck!
2007-09-11 05:13:06 · answer #2 · answered by waggy_33 6 · 1⤊ 0⤋
It would be a first mortgage. First mortgage does not mean this is the first mortgage you've ever had on this house but rather it is the first in a potential string of mortgages (with the second mortgage being called an equity loan). Tax-wise it would be the same as if you had just purchased the house.
2007-09-11 04:59:00 · answer #3 · answered by Anonymous · 0⤊ 0⤋
It'll be a refi, but you can still deduct the mortgage interest. Any amounts put back into the property are fully deductible. Money taken out for other purposes is limited to $100k so as long as you are using less than $100k for other purposes all of it will be deductible.
2007-09-11 05:30:20 · answer #4 · answered by Bostonian In MO 7 · 0⤊ 0⤋
Refinance
Any interest that you pay on the loan will be tax deductible. That is about it. If you pay points on the loan, you can deduct them but it must be over the life of the loan.
There is one caveat if you get hit by the AMT (Alternative Minimum Tax). The interest on the part of the loan used "to pay some bills" will be an add back for AMT purposes. If you don't get hit by AMT, don't worry about it.
2007-09-11 04:53:02 · answer #5 · answered by Wayne Z 7 · 0⤊ 0⤋
Refinance. However most places would like to loan 70,000 at a min for a mortgage. However look for a HELOC Home equity line of credit. Sort of like a check with your house as the asset. Higher rates than a mortgage but you control how much you spend and you arent locked in.
2007-09-11 04:51:17 · answer #6 · answered by Bob D 6 · 1⤊ 2⤋
Get a HELOC, Home Equity Line Of Credit, This is not a refinance or a purchase. Not sure of the tax deductions though.
2007-09-11 04:49:55 · answer #7 · answered by Anonymous · 0⤊ 2⤋
I believe you should look into a home equity loan. Depending on the state you live in, you can deduct the interest cost on some home equity loans on your taxes.
Nice that you have no mortgage!
2007-09-11 04:52:42 · answer #8 · answered by Spirit Girl 3 · 0⤊ 2⤋
I would hold off for a bit if you can. I see rates coming down soon. Try the line of credit then write off the interest.
2007-09-11 04:55:07 · answer #9 · answered by Anonymous · 0⤊ 2⤋