Question: My question >is which is the best way to purchase this land?

Answer: The home equity is definitely the better choice. To get a land loan normally requires 50% down, so you would not get one for the full amount anyway. But, if you get a loan on the land, then the interest is not deductible. If you get the home Home Equity Line of Credit (HELOC), then it IS deductible. that makes a difference.

PLus, you say you have a car loan. that is not smart either. You are paying 6.45% for it, and it is not deductible. Your HELOC shold be at PRIME (4.25% right now) so that drops the amount due down AND allows you to deduct it.

Don’t do the home loan. just a HELOC. And, right now, Compass bank and etrade are offering 2.9% for six months on HELOCs and then prime after that. Other may be too.

that wills ave you actual dollars, AND tax dollars to boot.

Every dollar counts.

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