My original loan was $261,577
I take it that was your loan "balance" on the closing date of the refinance.
, I refinanced $309,000 and took out $39,000 cash.
The math doesn't seem to work here. $309,000 minus $39,000 comes to $270,000. But I'm going to assume the $8,423 difference is closing costs on the refi.
Since the cash out was not used to buy, build, or improve your main home, the interest on that amount is not deductible anywhere on your tax return. You can only claim as a SCH A Itemized deduction the percentage of interest that is equal to the percentage of the refi that was used to pay off the original loan. I get a figure of 84.6%. Therefore, only 84.6% of your mortgage interest is deductible as a SCH A itemized deduction.
