New Options To Tap Home Equity

In light of rising interest rates a slew of banks are piling on incentives for home equity loans. Along with the increased interest rates banks have seen a rise in loan payoffs. Banks have seen the number of borrowers paying back loans 50% higher than last year.

Another result of rising interest rates is people opting for fixed rate loans which brings more predictability. Borrowers who have elected to keep this option have doubled in comparison to last year.

Finally, with all these new incentives it's important to keep in mind that pricing varies on geography. If you live around Northern Ohio, Denver, and Chicago you should benefit because they are highly competitive.

Home Equity Loan Tip

Use A Home Equity Loan To Convert Non-Deductible Loans Into Tax-deductible Interest:

If you pay non-deductible interest on a auto loan, credit cards, student loan or personal loan up to $100,000 total, obtaining a Home Equity Line of Credit (known as a HELOC) can convert that non-deductible loan interest into tax-deductible home equity interest when you pay off those loans.

Banks, credit unions and other lenders are eager to make you a home equity loan. For some unexplained reason, the default on home equity loans is virtually zero. Interest on such loans, up to $100,000, is tax-deductible as itemized interest.

However, if the purpose of your home equity loan is to use the funds for home improvements or in your business, there's no limit to the interest deductibility on your business tax returns.