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My husband works for a large financial services firm. We are getting a mortgage for our first home purchase through this company and one “benefit” they offer to employees is, if you get a mortgage through the company, they also offer a $ 2500 or $ 5000 (your choice) *non-secured* loan for a five year term. During that five years, you pay only interest and they pay principle. After five years, you pay both P&I. The catch is that the entire loan amount must be used toward a downpayment or closing costs for your refinance or purchase. Since this loan is being used 100% for home purchase purposes, is any of this interest tax deductible?

2 Thoughts on Can interest for non-secured real estate loans be tax deductible?
  1. Reply
    February 12, 2014 at 6:07 am

    The interest is not mortgage interest because it is not secured by real estate therefore it is not tax deductible.

  2. Reply
    February 12, 2014 at 6:36 am

    It is deductible….Just like the interest on HELOC’s and similar 2nd mortgage instruments are also deductible…

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