I owe nothing on the house,but I want to buy a another car instead and do some things around the house too. Can I use the money on a home equity loan for anything I want without restrictions? Thanks
2007-11-12 07:09:50 · 4 answers · asked by qdrones 3 in Business & Finance ➔ Personal Finance
Yes!!!
2007-11-16 09:14:18 · answer #1 · answered by Anonymous · 0⤊ 0⤋
I wouldn't take a home equity loan for the purposes of buying a car before I knew what car I was buying. Because you might get a great deal on the interest from the dealership, 2.9, 1.9, 0% financing beats any home equity rate even including the income tax deduction. Also, a car loan is secured by the car, not your home. If anything bad ever happened and you couldn't pay the car loan, they can only take back your car, not go after your home.
I would try to only borrow money for fixing up the house instead. I would try to take as little as possible, because you might carry that debt for 5, 10 or 15 years.
2007-11-12 08:49:49 · answer #2 · answered by monster5235 2 · 0⤊ 0⤋
Yes, you can use the home equity loan for anything you want.
If you are not under AMT rule, the interest on your $50,000 home equity loan is fully tax deductible. The IRS doesn't care what you use the money for: you can use the money to buy your car, go on a vacation, or throw a party to celebrate your interest deduction.
But if you're caught under AMT, the interest is tax-deductible only if the home equity loan is used for purchasing or improving your home.
2007-11-20 03:51:15 · answer #3 · answered by ksb k 2 · 0⤊ 0⤋
Spend it as you want!
One caveat: While the interest on the home equity loan is deductible, it is not deductible for AMT purposes unless the funds are used to buy or improve your home.
2007-11-12 07:13:50 · answer #4 · answered by Wayne Z 7 · 0⤊ 0⤋