Tax Tip

If you're buying or refinancing a house and know you'll need a loan soon for tuition or a car, take out as big a mortgage as you can, invest the excess cash, and use it instead of borrowing more. That way, according to KPMG Peat Marwick, you maximize tax-deductible interest. The strategy beats getting a home-equity loan later: You save origination costs and don't need to prove creditworthiness again.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.