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January 22, 2024
Question

If you have refi'd your mortgage several times and during a previous refi you paid off other debt how do you calculate what % of your mortgage interest is deductible?

  • January 22, 2024
  • 1 reply
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Current mortgage paid off a previous mortgage only

1 reply

KrisD15
January 22, 2024

If the new mortgage paid off the old mortgage ONLY (no cash out) the interest is not limited unless the loan you paid off had been refinanced earlier and cash taken out for something other than improving the property. 

 

The percentage is based only on the portion of the loan that was used to buy, build, or improve the original home that the loan was taken on.

 

If you ever took out cash when you refinanced, you must limit the interest to the amount of the original loan. 

If you only refinanced to get a better rate and never took a loan balance for more than the original amount, no adjustment would need to be made. 

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