Final answer:
Home equity loan interest is tax-deductible if the loan is used to improve the taxpayer's home, with terms often ranging from 5 to 30 years. These loans can be used to pay for various expenses, including college costs, and are not typically restricted in terms of use.
Step-by-step explanation:
Concerning home equity loans, the statement that home equity loan interest is tax-deductible up to a maximum of $100,000 is not accurate anymore due to changes in tax laws. As of the Tax Cuts and Jobs Act of 2017, interest on home equity loans is only deductible if the loan is used to buy, build, or substantially improve the taxpayer's home that secures the loan, and the total loan amount (including your mortgage) doesn't exceed the cost of the home. Home equity loans can have various terms, often ranging from 5 to 30 years, not just 1-5 years. Also, contrary to one of the statements provided, home equity loans can be used to pay for college costs; however, it may not be the most financially strategic option due to the risks involved, such as the possibility of losing one's home if unable to repay the loan. Additionally, the proceeds from a home equity loan are generally not restricted to a specific purpose and can be used for a wide range of expenses, making the statement that the proceeds are generally restricted as to purpose false.