Taxes can bite borrowers of home equity loans

Happy Thanksgiving!

(Flickr photo by The Suss-Man (Mike)

Home equity loans have regained some of their popularity in the wake of the housing crisis.

But borrowers need to be clear about the extent of their tax deductibility — at least until (and if) Washington completes wrangling over the deficit.  You’ll find the nitty-gritty in a 16-page PDF published by the IRS, from which I’ll try to furnish just the broadest of strokes.

In essence, you can deduct no more than $100,000.  Except. . .

The High Road: There’s nothing like our banks

A savvy friend of mine who owns a real estate brokerage in Westchester County called me the other day to vent his feeling about TD Bank.

Also a lawyer, “Neal” had responded to a direct appeal that offered him an incredibly low rate for a Home Equity Line of Credit, or HELOC.  It indicated that his credit score was in the enviable 800s.  (“Neal” asked that I refrain from identifying him.)

All he had to do, the mailing proclaimed, was furnish documentation and wait for a response from TD’s loan headquarters in Mt. Laurel, N.J.

He received a response, all right: