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Article: Pros and cons of using home equity loans: Compare rates, terms of deals.(Friday Home Guide)(News Analysis)
- Article from:
- The Washington Times (Washington, DC)
- Article date:
- February 9, 1996
- Author:
CopyrightCOPYRIGHT 1996 News World Communications, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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If you finance the purchase of a family car with an ordinary auto loan, the interest is not tax deductible. If you do it with a home equity loan, you get a tax write-off.
That is because a home equity loan is a form of second mortgage, and the tax benefit is enough to send homeowners scurrying out to apply for home equity loans for all sorts of purposes.
A home equity loan is a ready source of cash in case of emergency. You can use the home equity loan as a revolving line of credit, which is what it is and which differentiates if from a traditional second mortgage. You can establish the home equity line any time and not borrow against it unless you ...