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Tax Advantages
One great advantage to a home equity loan or line of credit are the potential
tax benefits. Most states permit similar deductions. For specific information
on how a home equity loan or line of credit will affect your taxes, be sure to
ask your tax advisor.
Generally, most of our customers will get full deductibility for the following
uses of a home equity loan or line of credit:
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Home improvement
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Debt Consolidation
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Purchase of major assests for personal use
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Financing education
These expenses are deducted from
gross income before calculating the taxes owed. So if you pay $3,500 a
year in home equity loan interest, you deduct $3,500 from your gross income.
That's $3,500 less of your income that can be taxed if you already itemize
deductions. Which can make a huge difference in your tax bill. (Figures cited
are for example only.)
 | | Some important points to consider: |
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| You can take these tax deductions only if you itemize your deductions (rather than using the standard deduction). |
| | | Interest is typically tax deductible on home equity loans and lines of credit unless your draw exceeds $100,000 and no improvement are made. |
| | | Homeowners who have paid down considerable principal over the years may not get full deductibility in some cases. |
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Home expenses that typically aren't tax-deductible:
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Home improvement expenses (other than interest on a home improvement
loan)
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Closing costs, except discount points
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Appraisal or loan application fees
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Annual or other fees, if any
For complete details on how deductibility of home loan interest and other expenses will affect your specific tax situation, ask your tax advisor. Or review a copy of
IRS Publication 936, Home Mortgage Interest Deduction. Or you can call 1-800-TAX-FORM (1-800-829-3676) to order a free copy.
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Countrywide has a huge selection of loans built to suit specific needs of our customers. Our home loan experts are ready to help you find the loan that’s right for you! Contact us now to get a FREE, no obligation loan consultation:
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1-800-825-4549 |
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Available 7 days/week |
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Quick and easy process |
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Low, up-to-the-minute rates available by phone |
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Ask about our no-closing cost loans |
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 Equal Housing Lenders. © 2008 Countrywide Bank, FSB, Countrywide Home Loans Division. Member FDIC. Trade/service marks are the property of Countrywide Financial Corporation, Countrywide Bank, FSB, or their respective affiliates and/or its subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved.
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