 Jessica
Community Mentor
Joined: 08 Jun 2004
Posts: 814
Location: OHIO
195.97 Dollars($)
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 Posted: Fri Aug 05, 2005 12:55 am Post subject: RE: |
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Hi Guest
Welcome to MortgageFit forum.
Tax restrictions are applied on borrowers who take home equity loans which when added up to the first mortgage exceeds the value of the property. Since your total debt add up to $87,500, which is greater than the property value i.e $50,000 so you can deduct the interest on only on a part of the home equity debt.
As calculated by the Internal Revenue Service, interest will be deducted on the part of the home equity loan which is equal to the excess of the property value over the original mortgage. So interest on the first $20,000 (70,000 - 50,000) of the home equity loan will be deductible.
Hope you will benefit from this information.
Please feel free to write back with further queries.
Regards,
Jessica. |
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