So if I cash out refi and use the cash to make future payments of principal or principal + interest on the home, does that make it deductible interest?
For example, I refinance a 200K loan into a 250K loan and use the 50K to make the payments in that year?
If I make those payments with 25K in the first year and 25K in the second year, is 225/250 of the interest deductible the first year and then all of it in subsequent years even if my balance on new loan is 210k after year 2 due to interest and points etc?
or do I have to wait until improvements or balance of the new loan is below the original loan to fully deduct that interest?
