Tax Deduction Eliminated on HELOC Interest
Home Equity Line of Credit Interest: Tax Deduction Eliminated by New Bill
Just in case you missed it, Marketplace reported the new tax bill that will go into effect on January 1, 2018 has eliminated the deduction that you can take for the interest paid on Home Equity Lines of Credit (HELOCs).
James B. Nutter & Company (JBNC) has been cautioning about the riskiness of HELOCs for some time now. National Mortgage News reported that the amount of tappable home equity is at an all-time high. As short term interest rates are beginning to rise right now, along with the rates of adjustable HELOCs, the new tax bill takes away your ability to deduct the interest paid on those loans. That is a double whammy to your wallet. We have always maintained that having one mortgage to handle all of your borrowing needs was better than having two. CNBC reported, the interest on first lien mortgages remains deductible, up to a certain amount. If you have a HELOC, now is the perfect time to combine those into one loan so that you can take full advantage of the interest deduction. Contact one of JBNC’s experienced Loan Officers and discuss your options. They will be able to run different scenarios for you and find the perfect solution to help you through this process.
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