Harvey was recently quoted by LendingTree in an article entitled: “Using A Home Equity Loan For Debt Consolidation.”
The Tax Cuts and Jobs Act of 2017 has changed the way Home Equity Loans and Lines of Credit are treated for tax purposes. Previously, certain home equity debt interest payments could be deducted for tax purposes whether or not the loan was used for improving the property it encumbers.
Now, under the new tax law, the deduction for interest paid on home equity loans and lines of credit is eliminated unless, per IRS Bulletin Issue Number IR-2018-32: Interest on Home Equity Loans Often Still Deductible Under New Law, the loan proceeds “are used to buy, build, or substantially improve the taxpayer’s home that secures the loan.”
In certain circumstances, even though home equity interest may not be tax deductible, there may be other reasons why home equity debt should be used to pay down other unsecured, more expensive non-deductible debt (like credit cards).
Please enjoy the attached article and Harvey’s interesting quotes therein: https://www.lendingtree.com/debt-consolidation/home-equity/