I recently refinanced my 300K mortgage @4% for a 570K @3.25% to cash out 270k to pay down a 5.75% 270k mortgage on an investment property. I then found out I cannot deduct that additional 270k interest because it was a cash out refinance. If I re-refinance the 570k(@2.5% luckily) will it reset the clock(so to speak) and I can then deduct the interest on the entire 570k(including the exempt 270k) since there is no longer a “cash out” but a straight refi?
