Planning to buy a house, people are considering all their possibilities and financial circumstances to calculate what they can afford. One of the important factors in such calculation is the option of mortgage interest deduction, provided by the government of the USA.
In most cases, you can deduct all of the interest you pay on any loan that is secured by your home, whether the loan is called a mortgage, a second (or third, fourth, fifth, etc.) mortgage, a home equity loan, a line of credit, or a home improvement loan.
However you must know that the tax deduction is not unlimited
Under periodic and unsuccessful attack since the Reagan years, this rule allows homeowners to deduct interest on home mortgages (including, with certain restrictions, second mortgages and home equity loans) up to $1 million, and also the property taxes on those homes. Deductions are also available for second homes that are, however infrequently, owner occupied. That deduction can also be taken for boats and possibly other “residential” vehicles that function as primary or second homes.
