Deductibility of Home Loan Interest

[keniz138]

What is the name of your state?
Rhode Island

From what I understand, all types of home loan interest are deductible, correct?

I ask b/c I am switching from a HELOC (which was deductible) to a 30/15 Home Equity Loan. Assuming interest on that will be deductible as well.

Thanks

[Snipes5]

Not "all" interest, but "most".

If your home acquisition debt is less than $1m, all interest will be deductible on an original loan.

On either a Home Equity or a HELOC, interest is deductible on up to $100,000 of Home Equity debt, provided that the debt does not exceed the amount of the original loan, plus improvements.

So if you have a loan that is >100%, some of the interest on it may not be deductible.

Snipes

[keniz138]

Well, my original loan was an 80/20 set up. 260,000 on a 7/1 ARM and 65,000 on a HELOC. I am currently refinancing the HELOC into a 30/15 fixed rate laon. All said, at the beginning my total loan amount was 325,000. After a year of payments on the big mortgage and the closing costs involved in this refi, my total amount of debt will be approximately 322000.

So, from what I can tell, all interest should be deductible, yes?

[Snipes5]

Yes

Snipes