Question by Leo L: Can I use interest from Cash Out Refinance on tax deduction?
I have mortgage amount in $ 50,000, and credit card debt in $ 30,000. I am planning to do cash out refinance and put mortgage & C/C debt together ($ 80,000). I am just wandering how I can use interest amount on tax deduction. Do I need to track dawn interest amount on $ 50,000(from original mortgage on home ) or I can not use any interest amount on Cash Out Refinance.
Before I make final decision, I would appreciate your advice.
Answer by card-ron
I assume you mean you are refinancing your mortgage and, based on the equity in your home, refinancing for a greater amount than your current mortgage (using the extra to pay off credit cards). If this is the case, the entire amount is considered a mortgage and any interest paid is deductible as mortgage interest.
Know better? Leave your own answer in the comments!