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line of credit or home equity loan?

Discussion in 'Money & Finance Forum' started by LarryD, Jul 10, 2006.

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  1. Jul 10, 2006 at 9:15 PM #11
    49erpi

    49erpi Full Access Member

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    The home equity line will be secured so it is going to be a better rate. If you have real good credit or are a "premium" customer, you should be able to get a rate at prime. The interest on you home equity line is also tax deductable.
     
  2. Aug 28, 2006 at 1:54 PM #12
    Redsnapper

    Redsnapper Burp, gargle, spit.

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    Also, try this little trick when you go to sell. Start a 2nd mortgage going up to 100% of the value of the home, pull out all the money, then sell. This way you don't pay taxes on capital gains, just a little trick I thought of, but have not yet put that one to use, but will in 3 1/2 years.
     
  3. Aug 28, 2006 at 1:58 PM #13
    Freakshow

    Freakshow Fuck you guys.

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    Uh...you don't pay capital gains on a primary residence unless you make...can't remember...something like $300,000.
     
  4. Aug 28, 2006 at 2:09 PM #14
    Thelt

    Thelt Full Access Member

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    As long as you live in your house for 2 of the last 5 years you do not pay taxes on gains when selling your primary residence. There may be a cap on it Freakshow says but I am not certain.
     
  5. Aug 28, 2006 at 2:16 PM #15
    Freakshow

    Freakshow Fuck you guys.

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    There IS a cap...just can't remember what it is. I know it's OVER $200,000 for sure.
     
  6. Aug 28, 2006 at 2:56 PM #16
    Redsnapper

    Redsnapper Burp, gargle, spit.

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    OK, I remember hearing that now [no capital gains on primary, if owned more than 2 yrs], please apply to second homes and/or investment properties.
     
  7. Aug 28, 2006 at 4:03 PM #17
    meatpile

    meatpile 7-9

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    I think there's also a cap on how much you can borrow. I don't think you can pull $250k on a heloc or loan and write it all off. I may be wrong.
     
  8. Aug 28, 2006 at 4:22 PM #18
    slydevl

    slydevl Asshole for the People!

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    This may be the dumbest bit of "advice" I have ever heard. Your closing lawyer will look at the orginal purchase price and compare it to the selling price to determine capital gains. Whether you have borrowed against the capital gains in any form is irrelevant.
     
  9. Aug 28, 2006 at 4:35 PM #19
    Redsnapper

    Redsnapper Burp, gargle, spit.

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    I may stand corrected, could've sworn a co-worker pulled this off, but I believe the title attorney was on board with him, (not disclosing names). Also, this is not the first time I've F'ed up here, but trying to keep those to a minimum now.
     
    Last edited: Aug 28, 2006
  10. Aug 29, 2006 at 11:02 AM #20
    Shrapnel

    Shrapnel Stinky

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    This is correct. Doesn't matter if the property was free & clear, or mortgaged to the hilt. Capital gains is based on how much profit you made in sale price over purchase price + any improvements.
     
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