A home equity loan is a loan that is available to you against the equity on a property. The calculation of the loan amount is done based on the property’s current market value. Before I tell you about the equity home loan interest tax deduction, let me share some important points:
A decrease in the outstanding housing loan or an increase in the property’s market value results in a rise in the house equity against which a loan can be taken.
The home equity loan is available against non-residential and residential properties. However, your property needs to be fully constructed and needs to be a freehold property, having a marketable and clear title.
“Is home equity loan interest tax deductible for rental property?” is a very common query. Well, let me tell you that a home equity loan doesn’t provide any tax benefits on repayment as is available to the borrower in the case of home loans. This is about the home equity loan interest deduction
You can take the home equity loan for any purpose, such as for refinancing a home loan, medical expenses, marriage expenses, or education of children.
You are required to provide relevant documents that establish the repayment and financial capacity of the borrower, along with a photocopy of the property papers as well as a valuation report.
I hope you like my answers on the equity home loan interest tax deduction.
Read what are the documents required to get a home equity loan
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Is home equity loan interest tax deductible for rental property?
Parul
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2 Year
2021-12-02T16:56:51+00:00 2021-12-09T11:26:01+00:00Comment
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