A few years back when I needed a home equity loan I had no idea that there could be HELOC tax advantages. I guess I should have read the fine print. Now that I’m finding out about the possible tax advantages, I’m loving my HELOC more than ever before! I’m sure it must have been mentioned during the loan signing but I was in the middle of an emergency, which is why I needed the money in the first place. I’m sure when the loan officer said something about HELOC tax advantages it probably went right over the top of my head.
Possible HELOC tax advantages
As it turns out, during the initial draw period of a HELOC, the monthly payments are interest only. Even after the draw period, when the loan goes into repayment, there will certainly be interest paid. This interest may be tax deductible, and that’s always good news. When I think about this advantage combined with the fact that I used part of the funds to pay off a high interest credit card, then I’m pretty happy with my HELOC.
Find out about HELOC tax issues
Any time you start talking about taxes and advantages, consequences and what not it’s important to research and get sound advice from you accountant. It also pays to have a look at the fine print of the loan documents you signed at the loan closing. It’s always best to be an informed consumer. If I hadn’t taken the time to have a look at the loan documents as I was cleaning out the downstairs desk, I may never have know about the possible HELOC tax advantages available to me.