Home Equity Debt

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Home Equity Debt

Debt collateralized by the value of one's home. The amount of this debt is generally the difference between the homeowner's equity in his/her house and the market value of the house. If home equity debt is not paid off, the lender may take possession of and sell the house in order to pay for the loan. This can occur even if the homeowner continues to make payments on his/her mortgage. This debt generally has a variable interest rate, which is nonetheless still lower than most other lines of credit.
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1 million for the first mortgage and home-equity debt combined.
The reason, said Rosica, a widely recognized expert on real estate tax law, is that although Section 11043 of the new tax law eliminated home-equity debt interest deductions, it left virtually untouched interest deductions for primary home mortgage debt ("acquisition indebtedness") that is used to buy, improve or construct a new home.
However, interest on home-equity debt is not deductible if the proceeds are used to purchase tax-exempt securities and is generally not deductible for alternative minimum tax (Sec.
The home-equity debt category represents an exception to the general rule provided in Temp.
Forgoing Home-Equity Debt Treatment to Maximize Interest Deductions
Student debt now exceeds aggregate auto loan, credit card and home-equity debt balances a making student loans the second-largest debt of U.
While financial institutions may not be eager to provide home-equity lines of credit in the current environment, during the past several years the amount of home-equity debt homeowners have layered on top of primary mortgages has risen to over $1 trillion.
Between mortgage financing and refinancing, along with increasing levels of home-equity debt, many middle-income households are relying on their ongoing income to service a monthly mortgage.
Interest paid on other types of consumer loans is not tax deductible, but most homeowners can deduct interest on as much as $100,000 of home-equity debt.
html) The Federal Reserve Bank of New York has come out with data that indicates student debt figures have exceeded aggregate auto loan, credit card, and home-equity debt balances, becoming the second largest debt of U.
163(h)(2)(d), "qualified residence interest" (QRI) includes interest paid or accrued during the tax year on (1) acquisition debt on a taxpayer's qualified residence or (2) home-equity debt on a taxpayer's qualified residence.
163(h)(3)(C) defines home-equity debt as any debt (other than acquisition debt) secured by a qualified residence, to the extent it does not exceed the residence's fair market value reduced by any outstanding acquisition debt the residence secures.