Hi all!
I had a mortgage on my old house then I bought a new house with cash. This year I got a new mortgage using my new house as collateral and then used the new mortgage to pay off the mortgage on my old house. I think this is called a cash out refinance. Basically what I wanted to achieve is to transfer the mortgage from my old house to my new house because I was thinking of selling the old house.
What I did not understand is that this has some major tax implication. Based on my research, since I used the money from my cash-out refinance to pay off some other debt (mortgage), the interest on my new mortgage is no longer deductible. Is this the correct understanding? Now the interest from my new mortgage is no longer deductible?
Thanks so much!
Tao
