Using HELOC for Investmt. (by oradba [NJ]) Jan 17, 2018 11:39 AM
Using HELOC for Investmt. (by Patrick [VA]) Jan 17, 2018 11:42 AM
Using HELOC for Investmt. (by oradba [NJ]) Jan 17, 2018 11:45 AM
Using HELOC for Investmt. (by Patrick [VA]) Jan 17, 2018 11:49 AM
Using HELOC for Investmt. (by Patrick [VA]) Jan 17, 2018 11:59 AM
Using HELOC for Investmt. (by NC INVESTOR [NC]) Jan 17, 2018 4:19 PM
Using HELOC for Investmt. (by Peter [NH]) Jan 17, 2018 4:29 PM
Using HELOC for Investmt. (by oradba [NJ]) Posted on: Jan 17, 2018 11:39 AM Message:
I have an existing HELOC which I used to purchase my current investment property.
I borrowed 180,000 @ 3.49%
I am offered Home Equity Loan @4.49%.
I have two questions:
#1) Can I write-off interest on entire 180,000 towards business expense or only a part of it ?
#2) With new tax code and anticipated rate increases, will it make sense to convert to HE Loan ? --162.44.xxx.xxx |
Using HELOC for Investmt. (by Patrick [VA]) Posted on: Jan 17, 2018 11:42 AM Message:
HELOCs usually have variable interest rates. I would put a conventional mortgage on it at a fixed interest rate for 15 or 30 years. The interest rates cant get much lower than they are now. --70.184.xxx.xx |
Using HELOC for Investmt. (by oradba [NJ]) Posted on: Jan 17, 2018 11:45 AM Message:
@Patrick - can interest on entire $180,000 be written off as business expense ? ( since HELOC deduction is only limited to $100,000 ). --162.44.xxx.xxx |
Using HELOC for Investmt. (by Patrick [VA]) Posted on: Jan 17, 2018 11:49 AM Message:
Sure....look at your schedule C. Their is a block for "mortgage interest" and "other interest". You can only deduct the mortgage interest that you paid for the year. You can also right off the costs of the loan ie closing costs, loan origination fees, points etc etc. --70.184.xxx.xx |
Using HELOC for Investmt. (by Patrick [VA]) Posted on: Jan 17, 2018 11:59 AM Message:
To be clear, I took out a heloc on one property to purchase an investment property for 90k in 2016. I then took another heloc and borrowed an additional 30k to perform remodeling of the new house...new kitchen, floors, paint etc etc.
The law says that you have to own the property for 6 months before you can do a refinance with "Cash Back" (I wanted cash back to pay off the 30k remodelling).
So in May 2017 the house remoddeled appraised at 174k. I took out a conventional mortgage for 124k at 4.9% fixed for 30 years. My payments are 650 a month. 90k was used to pay the first heloc off. 30k was used to pay the second heloc off, and 4k was for the fees.
As long as there is a renter in the fouse, I pay 1100 a month, or 450 extra, so that the house will be paid off in 12 years. --70.184.xxx.xx |
Using HELOC for Investmt. (by NC INVESTOR [NC]) Posted on: Jan 17, 2018 4:19 PM Message:
i don't know if this will help.
I got a HELOC in 2007 when we started. All the funds were used for property expenses. The payments have been made through the LLC. The HELOC is about to expire and before the new tax law my plan was to combine my mortgage, which is very low and the HELOc into a single mortgage.
When we did the Q&A follow up with John Hyre I asked if it made sense to do that. He said it did make sense as long as the combined refi was under the $750,000 for personal residence which it is. I will continue to pay that portion of the refi that covers the residence and the LLC will pay MI on it's portion which is double the home mortgage. --71.75.xx.xx |
Using HELOC for Investmt. (by Peter [NH]) Posted on: Jan 17, 2018 4:29 PM Message:
To me $180,000 is a lot and I would probably refinance into a 30 year fixed mortgage in order to eliminate the rate risk. I have a large HELOC on my personal residence that I use for some investments and then pay it down aggressively. Usually I try to not owe anything on my home or very little at least. I am not a CPA but you should be able to deduct all interest as long as you can prove all monies borrowed went toward purchasing the investment. --73.61.xx.xxx |
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