Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Returning Member
posted Jun 7, 2019 3:28:47 PM

For the question that asks how much of a refi loan was spent essentially towards the home, do I input the principal balance of my original loan that was full paid?

I refinanced my original mortgage in 2017. I secured a $203,300 loan, of which $166,559.23 was intended to pay off my existing mortgage.  The rest was to pay off other debt. My previous lender actually applied $164,666.95 towards the remaining principal, and $754.72 towards interest.  I don't know what amount to enter in TurboTax for that question that asks how much as been spent towards the home.  Thank you for your help!

0 1 557
1 Replies
Level 15
Jun 7, 2019 3:28:49 PM

"My previous lender actually applied $164,666.95 towards the remaining principal, and $754.72 towards interest."

So the total amount applied to the existing mortgage before the refi was $165,421.67.  That's the same exact amount of the new loan that is applied to the residence also. Therefore, you will be able to deduct 81.3% of the interest on the new loan, since 81.3% of what you borrowed on the refi is to pay for the house. The remaining 18.7% was used to pay unsecured debt on which the interest on that unsecured debt is not deductible.