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| *Loan,banking and credit>>>tax advice |
I need to get some advice on an interest only loan. Do you still get a tax advantage? |
I need to get some advice on an interest only loan. Do you still get a tax advantage? sure...you do still get the interest deduction on a home. But in a down market it gets tough to sell. Remember, interest only means you are relying 100% on the appreciation. So, if you have multiple years of no appreciation then you go to sell it you could have to pay taxes or worse....pay the difference between your loan value and what you actually sold it for. So, make sure you invest well in the meantime. Only time you should do this is if you can invest 100% of the difference and earn a more than adequate return. Also would not be good if moving in the near future is a possibility. Interest on an interest-only mortgage is deductible just like any other mortgage interest. If it is a loan for your primary residence, yes . That is all you get though because you are never paying off the loan and the bank will own it forever . . . even when you are 75 and maybe can't afford to keep paying the interest. I hope you don't end up homeless at 75 ! |
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