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Lucy, Esq.
Lucy, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 30168
Experience:  JA Mentor
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Modified home equity loan with 30.000 in interest that was

Customer Question

modified home equity loan with 30.000 in interest that was placed as finance charges by bank,can this be deducted as mortgage interest since it is from existing mortgage
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Lucy, Esq. replied 1 year ago.


I'm Lucy, and I'd be happy to answer your questions today.

People who itemize their deductions on a Form 1040, Schedule A, may be eligible to deduct some of the interest on their Home Equity Loans. You're eligible to itemize deductions if the total of all deductions is more than your standard deduction for your filing status (which it usually would be, if you're including interest on a mortgage or home equity loan). You also must have obtained the loan after 1987.

What you're allowed to deduct is interest on $100,000 of the home's value ($50,000 if you're filing Married Filing Separately) or total amount of equity in the home. Any interest on the remaining balance is considered personal loan interest and would not be deductible. So, for example, if your home is worth $100,000 and you have $75,000 worth of loans, you can deduct the Home Equity Loan interest paid on $25,000.

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