Plus loans vs home equity/mortgage loans

notrichenough
Sun, 25 Apr 2010 22:01:53 +0000

I thought that h/e loans were only deductible if you use the proceeds toward the cost/upkeep of the home (like remodeling). Am I wrong?

You can deduct the interest on $100,000 of home equity loan principal that is used for something other than to cover the purchase price and improvements to the house, for example to buy a car or pay for college.

If you are not already itemizing deductions (that is, you take the standard deduction), or if your income is at the level where itemized deductions are getting phased out, then you lose some (maybe all) of the value of being able to deduct HE loan interest.