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Happy
Ho&day
ailamm.
In celebration of ‘Thanksgiving The
Village Cafe will he closed‘Thursday
andjriday, November 26 & 27.
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Real Estate d|J
Eileen M. Day realtor
HOME EQUITY
LOAN LOOPHOLE
QUESTION: Is it true that I can borrow money on my home equity, deduct the interest on the loan and use the funds to purchase a car, vacation or any other big-ticket item?
- ANSWER: This is one of the unabashed loopholes provided to homeowners. Although tne Tax Reform Act phases out the deductibility of interest on car loans, credit cards and other consumer borrowing, you can get around this restriction with a home equity loan. Interest on such borrowing remains deductible, regardless of how you spend the money, as long as the total borrowed on your first and second mortgages and home equity loan doesn’t exceed the purchase price of the home plus the cost of any improvements.
More good news. Interest on a home equity loan used for educational or medical expenses is FULLY deductible if it does not exceed the current MARKET value of the home less other outstanding mortgages. Also, interest on such a loan taken out on or before August 16, 1986 is fully deductible.
If there is anything we can do to help you in the field of real estate, please drop in at EILEEN M. DAY, Realtor, The Clopton House, Washington, Va. 22747. Phone: 675-3033. We’re here to help.
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