Question: Sean and Amy Anderson have a home with an appraised value of $170,000 and a mortgage balance of only $85,000.
Given that an S&L is willing to lend money at a loan-to-value ratio of 70%, how big a home equity credit line can Sean and Amy obtain?
How much, if any, of this line would qualify as tax-deductible interest if their house originally cost $100,000?