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How the New Tax Law Affects Your HELOC or Second Mortgage

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If you’re a homeowner with a fixed-rate second mortgage or home-equity-line of credit (HELOC) on an existing home, it may not be clear yet how the new “Tax Cuts and Jobs Act” will affect you.


The big question is – can you continue to deduct mortgage interest on second mortgages and HELOCs?


Well, it depends on your unique situation and a number of factors:


  • Did you obtain the second loan to purchase, construct or substantially improve your home?
  • Did you get the existing second loan or HELOC prior to December 15, 2017?
  • Are you itemizing your deductions for interest on acquisition indebtedness or applying Alternative Minimum Tax (AMT)?
  • Is this second loan on a primary home or another residence you own?


Depending on the answers to these questions, as provided by a tax and/or legal advisors, there might be an opportunity for you to refinance and consolidate an existing second loan or HELOC into a new first mortgage on a home.


I recommend finding out the rates/closing costs you qualify for with a new loan. It’s also important to do the math and check with your tax advisor to see if this option fits your unique situation.


If you’re thinking about refinancing your home, please contact us about mortgage options that will help you achieve your goals.


Opes Advisors, A Division of Flagstar Bank, is neither a law firm nor a certified public accounting firm and does not provide legal or tax advice. Consult your accountant or tax advisor for advice specific to your situation.

Information is accurate on the date of publication. Please check with a Mortgage Advisor and consult with your tax advisor for current information related to your specific situation.

Programs only for qualified borrowers. All borrowers subject to credit approval and underwriting terms and conditions. Programs subject to change without notice. Some restrictions apply.

Opes Advisors, a Division of Flagstar Bank | Member FDIC | Equal Housing Lender