@DMarkM1 - but I do not think that is what the question is about. unless the cashout was used to improve his current residence, the related interest is not tax deductible because of the new rules.
@teddy595 - here is how to look at it.....
1) what was the remaining balance of the 2005 mortgage when you refinanced it
2) for the piggy back HELOC, what was the lower of the balance at the time you purchased the house or when you refinance it into the cash out refi.
the sum of items 1 and item 2 above is your 'acquisition debt'
The cash out refi balance that is MORE THAN the answer to the above was not used to acquire or improve your home (because you stated it was used to pay down credit cards). The related interest is not tax deductible.
So let's say the answer to 1) and 2) is $150,000. and the cash out refi balance is $160,000. Then 150/160 of the interest for this year is tax deductible; the rest is not,
