Homeowners are optimistic that their home’s value will continue to increase, and they’re increasingly turning to home equity loans to try to make their homes even more valuable. But a new survey shows they’re unclear on how new tax reform laws could impact home equity loans.
More than 80 percent of about 1,000 homeowners recently surveyed said that they believe the value of their home will increase over the next three years as well as over the next five years, according to a new study by LendEDU, a marketplace for student loans, credit cards, and other financial products. Fifty-two percent of homeowners say that they used a home equity loan for home improvement projects, and 89 percent believe that the home equity loan will increase the value of their home by even more.
But LendEDU’s study does sound some caution on the home equity loan market in the coming months. Only 4 percent of homeowners knew about the removal of home equity loan interest deductions from the new tax reform plan, the survey showed. Previously, consumers could deduct interest paid on up to $100,000 of home equity debt.
Nearly 44 percent of homeowners surveyed said they best view the equity in their home as an “investment for my future retirement.” Twenty-three percent of respondents said they viewed the equity in their home as a way to one day trade up to a bigger home.
Source: “Home Equity Loans Survey & Report,” LendEDU