Tax Question: Should I buy rental property beside a mortgage or nick out a home equity loan?
I am buying a rental property for $50K. I will put 10K down so I need to borrow $40K
I have 2 offer that will determine whether I will apply the mortgage interest on my schedule E for rental property or as an itemized deduction on my 1040.
Home equity loan against my primary house at 6.09% next to $300 loan processing fee. 15 year note - 1st years interest gift will be $2452 - I think this interest would be an itemized deduction.
Mortgage for the investment property at 6.25% next to 1 3/8 points. Total fee is $2100 including points. 15 year note - Ist years interest transfer of funds will be $2492 I think this would be an expense on my schedule E.
I am at a 28% toll bracket and have no other mortgage on my primary house.
To further complicate the picture I have $34000 surrounded by student loan debt and could roll this into my home equity loan.
What would be best for my taxes? Take the home equity loan or a mortgage on the new property? Should I roll my student loans into the home equity loan?
Answers:
mortgage.
also, consider for future RE venture;
tax certificates or county annual RE foreclosure sale.
lastly; think about becoming a complicated money
lender!
[they want to obtain the prop, not
have borrowers compensate them back] Source(s): RE broker
A mortgage will have greater tax advantages and won't really cost more than your home equity loan.
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I have 2 offer that will determine whether I will apply the mortgage interest on my schedule E for rental property or as an itemized deduction on my 1040.
Home equity loan against my primary house at 6.09% next to $300 loan processing fee. 15 year note - 1st years interest gift will be $2452 - I think this interest would be an itemized deduction.
Mortgage for the investment property at 6.25% next to 1 3/8 points. Total fee is $2100 including points. 15 year note - Ist years interest transfer of funds will be $2492 I think this would be an expense on my schedule E.
I am at a 28% toll bracket and have no other mortgage on my primary house.
To further complicate the picture I have $34000 surrounded by student loan debt and could roll this into my home equity loan.
What would be best for my taxes? Take the home equity loan or a mortgage on the new property? Should I roll my student loans into the home equity loan?
Answers:
mortgage.
also, consider for future RE venture;
tax certificates or county annual RE foreclosure sale.
lastly; think about becoming a complicated money
lender!
[they want to obtain the prop, not
have borrowers compensate them back] Source(s): RE broker
A mortgage will have greater tax advantages and won't really cost more than your home equity loan.
Related Questions:
Thinking roughly speaking buying a hot home, but it have a mortgage. Can we still buy another home?
We are sort of in the market for a up to date home. But we have a mortgage on the one we're in. I be wondering if there is a way to...