Looking for MORE tax deductions?

You may not need equity in the house for the loan, but be careful on whether or not the interest is deductible as Mortgage Interest then. I would advise consulting a “knowledgeable” tax professional.

You are correct about that I have yet to see one loan that has been funded that was not deductable, but good advice about consulting a tax person. I should have included that because not everyone’s financial status is going to be the same, and there are some that may not be able to take advantage of the deductions, but it is very rare. Thanks again

Although some get around the rule, you can deduct the interest of up to 100% of the value of your property. If you have a 100k valued home and owe $70,000, and have a second mortgage for say $20,000, then if you go this way, you can only deduct the interest of $10,000. You also only deduct interest if you itemize. I have not yet heard of this product, does it put a lein against your property in any way? And I would assume if there is a lein then it would be third in line behind the primary and second (if there is a second mortgage). If an individual defaults on this loan, can they take your home?

Yes there is a mortgage that we file against the property, and we will take a 3rd position based on the fact that we are looking at the auto/boat as collateral. This loan may work for some and may not for others, and that is not something that I can tell you until we go through a loan application and look to see where we stand. As stated above, this is something that should be talked about with your tax person

In the event of default we could take the auto/boat back and if that collateral was not enough to pay the loan back in full, then yes we would look to the home to pay the balance of the loan.

Over all that does sound interesting, one has to look at the after tax cost of the interest, not just the “up front” interest rate, which if you are able to deduct the interest 100% and in a higher tax bracket, makes a big difference. For example a 7% boat loan, nondeductible, vs. a 7 1/2% deductible loan: The 7 1/2% comes out cheaper in the long run.

Take advantage of this great way to maximize your deductions. The credit union offers a loan product called an RPM. It stands for Regular Plus Mortgage, and we can do this on anything that you can finance. Take a truck or boat for example. You still get the same great rate and flexibility with terms, but we file a mortgage so you can deduct the interest as mortgage interest. When we do an RPM we are looking at the truck or boat as collateral, but the mortgage is there so you can take advantage of the tax deductibility. You do not need to have an appraisal done on the home to qualify for this kind of loan, there are absolutely no closing costs involved…period. Look at it this way, you have to pay interest on the loan, why not be able to deduct that interest as mortgage interest. Feel free to contact me @ 763-549-6502 for further assistance with any loan product we have to offer.

Bob Bowman

Branch Manager

Your illustration was correct, but the actual rule is lesser of Equity or $100,000. Like I said, consult a “knowledgeable” tax professional. (There are many that don’t fit the knowledgeable part. )

You may not need equity in the house for the loan, but be careful on whether or not the interest is deductible as Mortgage Interest then. I would advise consulting a “knowledgeable” tax professional.

You may not need equity in the house for the loan, but be careful on whether or not the interest is deductible as Mortgage Interest then. I would advise consulting a “knowledgeable” tax professional.

You are correct about that I have yet to see one loan that has been funded that was not deductable, but good advice about consulting a tax person. I should have included that because not everyone’s financial status is going to be the same, and there are some that may not be able to take advantage of the deductions, but it is very rare. Thanks again

You are correct about that I have yet to see one loan that has been funded that was not deductable, but good advice about consulting a tax person. I should have included that because not everyone’s financial status is going to be the same, and there are some that may not be able to take advantage of the deductions, but it is very rare. Thanks again

Although some get around the rule, you can deduct the interest of up to 100% of the value of your property. If you have a 100k valued home and owe $70,000, and have a second mortgage for say $20,000, then if you go this way, you can only deduct the interest of $10,000. You also only deduct interest if you itemize. I have not yet heard of this product, does it put a lein against your property in any way? And I would assume if there is a lein then it would be third in line behind the primary and second (if there is a second mortgage). If an individual defaults on this loan, can they take your home?

Although some get around the rule, you can deduct the interest of up to 100% of the value of your property. If you have a 100k valued home and owe $70,000, and have a second mortgage for say $20,000, then if you go this way, you can only deduct the interest of $10,000. You also only deduct interest if you itemize. I have not yet heard of this product, does it put a lein against your property in any way? And I would assume if there is a lein then it would be third in line behind the primary and second (if there is a second mortgage). If an individual defaults on this loan, can they take your home?

Yes there is a mortgage that we file against the property, and we will take a 3rd position based on the fact that we are looking at the auto/boat as collateral. This loan may work for some and may not for others, and that is not something that I can tell you until we go through a loan application and look to see where we stand. As stated above, this is something that should be talked about with your tax person

Yes there is a mortgage that we file against the property, and we will take a 3rd position based on the fact that we are looking at the auto/boat as collateral. This loan may work for some and may not for others, and that is not something that I can tell you until we go through a loan application and look to see where we stand. As stated above, this is something that should be talked about with your tax person

In the event of default we could take the auto/boat back and if that collateral was not enough to pay the loan back in full, then yes we would look to the home to pay the balance of the loan.

In the event of default we could take the auto/boat back and if that collateral was not enough to pay the loan back in full, then yes we would look to the home to pay the balance of the loan.

“but the actual rule is lesser of Equity or $100,000”

Or $50,000 if married filing separately.

Over all that does sound interesting, one has to look at the after tax cost of the interest, not just the “up front” interest rate, which if you are able to deduct the interest 100% and in a higher tax bracket, makes a big difference. For example a 7% boat loan, nondeductible, vs. a 7 1/2% deductible loan: The 7 1/2% comes out cheaper in the long run.

Over all that does sound interesting, one has to look at the after tax cost of the interest, not just the “up front” interest rate, which if you are able to deduct the interest 100% and in a higher tax bracket, makes a big difference. For example a 7% boat loan, nondeductible, vs. a 7 1/2% deductible loan: The 7 1/2% comes out cheaper in the long run.

chomps, that is correct.

Bob,

I want to apologize to you if you took my post as “taking a shot at you.” That was not the intent, whatsoever. My intent was to caution everyone to use/contact a tax advisor to make sure the interest would be deductible/advantageous to them.

Apparently I ruffled at least one person’s feathers. Sorry for the confusion.

JD

Thats ok, I don’t claim to be a “knowledgeable” tax professional, but I did sleep at a Holiday Inn last night.

Your illustration was correct, but the actual rule is lesser of Equity or $100,000. Like I said, consult a “knowledgeable” tax professional. (There are many that don’t fit the knowledgeable part. )

Your illustration was correct, but the actual rule is lesser of Equity or $100,000. Like I said, consult a “knowledgeable” tax professional. (There are many that don’t fit the knowledgeable part. )

Quote:

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Bob,

I want to apologize to you if you took my post as “taking a shot at you.” That was not the intent, whatsoever. My intent was to caution everyone to use/contact a tax advisor to make sure the interest would be deductible/advantageous to them.

Apparently I ruffled at least one person’s feathers. Sorry for the confusion.

JD

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No problem at all ….I agree with you 100%, it is something that we always talk about with our members when we do these loans. I have no background in tax advising, just loans!

Thanks

Whenever you change your financial status, it is highly advisable to consult a tax person first. A simple phone call could save you thousands when you “think” you are saving yourself some money.

“but the actual rule is lesser of Equity or $100,000”

Or $50,000 if married filing separately.

“but the actual rule is lesser of Equity or $100,000”

Or $50,000 if married filing separately.