New Tax Law Could Change Your HELOC Deduction

Dated: 01/09/2018

Views: 116

‘Tappable equity’ at record high, but tax law could change impact

JACKSONVILLE, Fla. – Jan. 8, 2018 – Jacksonville-based Black Knight's monthly Mortgage Monitor found that homeowners' "tappable" equity reached a record high in the third quarter.

As of Sept. 30, 42 million homeowners with a mortgage had nearly $5.4 trillion in equity available to borrow against, assuming a maximum 80 percent total loan-to-value ratio, according to the report. More than 80 percent of all mortgage holders now have available equity to tap via a first-lien cash-out refinance or home equity line of credit (HELOC).

Under the recently passed tax reform plan, however, interest on HELOCs is no longer deductible, according to the report, increasing the post-tax expense of such products for those who itemize.

Black Knight's Ben Graboske says the math would still favor HELOCs for many borrowers with high unpaid principal balances who take out low-dollar lines of credit. However, for low-to-moderate "unpaid principal balance" borrowers taking out larger amounts of equity – assuming interest on cash-out refinances remains deductible – the post-tax math may now favor a cash-out refi.

Florida is among states with the highest percentage of non-current loans and seriously delinquent loans, Black Knight reported.

Source: MBA NewsLink (01/08/18) Sorohan, Mike

Latest Blog Posts

13 Simple Money Moves You Should Make Before The End Of The Day

13 Simple Money Moves You Should Make Before the End of the DayTHE PENNY HOARDERDECEMBER 1, 2017Renato Arap/Getty ImagesDISCLOSURE:Some of the links in this post are from our sponsors. We're letting

Read More

BEST TIP TO FIRST TIME BUYERS ACT FAST

Best Tip to First-Time Buyers: Act FastDAILY REAL ESTATE NEWS | MONDAY, MAY 14, 2018A shortage of homes for sale and rising home prices are making it challenging for first-time buyers, in,

Read More

5 Ways You Can Save Money When Buying A House

5 Ways You Can Save Money When Buying a House By Larry AltonMay 3, 2018Real Estate Investing BasicsWhile many first-time home buyers assume that buying a house is a straight-forward process,

Read More

CASAS EN VENTA EN ORLANDO

Comprar una casa en Orlando, FloridaDesde que se conmemoraron, el refugio ha sido una de las principales necesidades del hombre junto con la comida y la ropa. A lo largo de los siglos, esta

Read More