Hello all!
Currently we own a home where we have both a fixed-rate mortgage and a variable-rate HELOC. We have the HELOC for complicated reasons that I can go into if necessary but both loans are wholly acquisition debt -- all the money went to buying the house, and we have never taken any cash out of the HELOC since.
Since the HELOC is variable rate and only has a 10 year term, I am now trying to refinance things to get the complete debt onto one 30-year fixed loan. It looks like I will be able to do this, but in the process will need to roll some of the closing costs of the refi into the loan itself.
I know that, under the new tax law just passed, you will only be able to deduct interest on the portion of your mortgage or HELOC that represents "acquisition debt." My question is: will the amount added to the loan by the refi costs trigger this provision? That is, will I only be able to claim interest on the amount of debt that I had before the refi, and will need to exclude the extra debt from the refi charges until I pay that part down?
I know this is new law and may not be entirely clear yet. Thanks in advance for any guidance you can offer.
