Mortgage interest deduction question | TigerDroppings.com
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LSUSUPERSTAR
LSU Fan
TX
Member since Jan 2005
10677 posts

Mortgage interest deduction question

Would it be wise to get another mortgage on my home to pay off student loans so that I may deduct more interest?


ItNeverRains
LSU Fan
Franklin, TN
Member since Oct 2007
7603 posts

re: Mortgage interest deduction question
Yes. Or No. Without numbers this is impossible to answer


foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
31905 posts

re: Mortgage interest deduction question
quote:

Without numbers this is impossible to answer


This.

If your current rate is high that by itself could be reason enough. If not you might be better off with an equity line.

Bear in mind that normally with a mortgage or equity line the flip side is that you could lose your house if you can't make the payment. However, you can't get out of student loans anyway so this risk is somewhat lower than usual.


LSUSUPERSTAR
LSU Fan
TX
Member since Jan 2005
10677 posts

re: Mortgage interest deduction question
Would I also have to itemize and overcome the standard deduction for it to be beneficial?


Libertariantiger
LSU Fan
Member since Nov 2012
520 posts

re: Mortgage interest deduction question
Need to post numbers. For example I have student loans ranging from 2-7%. So it would be yes to a 7% range and no to a 2% most likely. U would have to itemize as home mortage is not deductible if u take standard, and it is not easy getting over standard deduction with rates being 3-4%.


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foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
31905 posts

re: Mortgage interest deduction question
quote:

Would I also have to itemize and overcome the standard deduction for it to be beneficial?


Not necessarily. It would probably help regardless but again we need numbers.

Keep in mind that even if the standard deduction is better this year, that might not be so a few years from now. Also, you may have substantial 401(k) or IRA contributions that you are also deducting ten years from now.

That said, unless you have a lot of student debt it may not be worth the expense of refinancing. And if you do have a lot, you may not be able to borrow enough. Again, numbers are needed.


TigerintheNO
LSU Fan
New Orleans
Member since Jan 2004
24992 posts

re: Mortgage interest deduction question
quote:

Also, you may have substantial 401(k) or IRA contributions that you are also deducting ten years from now.



aren't those pre-tax and have nothing to do with the standard decuction


Libertariantiger
LSU Fan
Member since Nov 2012
520 posts

re: Mortgage interest deduction question
Also if the loan is a second mortage line of credit for this sort of thing, It should be inexpensive to get the money. Most banks do it for $500 if u have the equity.


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foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
31905 posts

re: Mortgage interest deduction question
quote:

aren't those pre-tax and have nothing to do with the standard decuction


No. If you are claiming the standard deduction you can't itemize.


TigerintheNO
LSU Fan
New Orleans
Member since Jan 2004
24992 posts

re: Mortgage interest deduction question
quote:

No. If you are claiming the standard deduction you can't itemize.


Correct, but your 401K contributions are pre tax, right?


yellowfin
Illinois Fan
Coastal Bar
Member since May 2006
77291 posts

re: Mortgage interest deduction question
Yes 401k contributions have nothing to do with the standard deductition


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