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Why Right Now Is the Best Time to Plan for 2018 Home Projects

Home Equity Loans in 2018

Jan 10, 2018 | Blog

Happy new year! Check out this week’s Gimme Some Truth on iTunes or Soundcloud for some Financial New Year’s Resolutions.

As the New Year’s celebrations come to a close, we enter 2018 with a tax code that looks much different than the tax code of 2017. While some will be continuing the celebration due to the changes, the tax year of 2018 will present different opportunities and challenges as we adapt to new standard deduction levels, adjustments to tax brackets, and changes to itemization. We will focus today on the mortgage interest deduction, more specifically, home equity loans.  

Home equity loans have grown in popularity over the last twenty years as a tool for such things as debt consolidation, home improvement, and tuition bills to name a few. Under the right circumstances, home equity loans offered a great solution for people looking for a low cost and tax-deductible debt option. Unfortunately, the tax-deductible aspect is now a thing of the past.  The new legislation states that home equity loan interest is no longer tax deductible. For many people, this means the loss of a large and impactful tax deduction. However, primary residence first mortgage loan interest is still deductible.

For people who hold a large balance on a home equity loan, you may want to have a conversation with your financial advisor and mortgage loan officer. It may make sense to combine a first mortgage and a home equity loan in the right scenario. This is not a solution for everyone with an equity loan and should only be explored with the assistance of mortgage and tax professionals. That said, first mortgage rates are still at historic lows and looking at a mortgage refinance may provide a way to lower the interest rate on your first mortgage and combine an equity loan into a primary mortgage as well. Feel free to contact our office if you would like to discuss your situation in greater detail.

Walkner Condon Financial Advisors is a registered investment advisor with the SEC and the opinions expressed by Walkner Condon Financial Advisors and its advisors in this piece are their own. Registration with the SEC does not imply a certain level of skill or training. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice.

Information presented in this piece is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed.

Information in this piece does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Readers are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.