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Article: CONSUMER CREDIT SHIFTING TO HOME EQUITY LOANS
- Article from:
- THE JOURNAL RECORD
- Article date:
- August 28, 1987
- Author:
CopyrightCopyright (null) The Journal Record. Provided by ProQuest LLC. (Hide copyright information)
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We borrow a lot, we Americans. Consumer credit at the end of
May, as reported by the Federal Reserve Board, totaled more than
$580 billion. But there's a shift taking place in the way we
borrow, a major shift from consumer credit to home equity loans.
Why the switch?
Because savvy consumers know that the Tax Reform Act of 1986
phases out income tax deductions for consumer interest but retains
most deductions for home equity loans.
Under the law, first and second mortgage loans (including home
equity loans) made before Aug. 17, 1986, are fully deductible;
those made after that date are deductible up to an amount equaling
the original cost of the house plus any home improvements. ...