Cash out refi of primary or loan on rental property

Forum|Forum|1 year ago
May 14, 2024
2 replies
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Im buying a vacation rental and wondering which affords the better mortgage interest tax deduction. Getting a cash out refinance of my primary for the purchase or getting a regular purchase mortgage on the rental property? The interest rates are higher on the rental property loan.

Thanks

Bsch4477

Employee

You can’t deduct the interest from the refinance unless the loan is used to buy, build, or substantially improve the property that secures the loan.

mshellAuthor

Thank you

AmeliesUncle

Refinance or take out a second loan?

Do you Itemize?

As was mentioned, at your income level, it is in your best interest to go to a good tax professional and/or financial advisor that can look at your ENTIRE situation, rather than asking random people on the internet with limited knowledge about your specific circumstances.