Maybe it is not exactly a re-finance, It is refinancing with a cashout - pay back the old loan and take out a new loan with a cashout.
It's still a refi. Do take note that for whatever percentage of the refi was not used to pay off the old loan, you can only deduct an equal percentage of the mortgage interest. For example, if you owed $40K on the old loan, refi'd for $50K, then only 80% of the refi was used to pay off the old loan. Therefore, only 80% of the mortgage interest on the refi is deductible.
You can claim more than 80% equal to the percentage of the proceeds used to buy, build or improve the property you refi'd though.
Thank you! I did not know that. But this gets complicated, to determine year after year what qualifies as 'improving the property', since the new loan is for a long 20 or some years. But I understand what you are saying.
Besides the loan fees, it has Title Charges such as: ALTA loan Policy, CLTA Environmental Protection Lien, CLTA Designation of Improvements, CLTA Restrictins, Encroachments and Minerals Loan Policy, Recording Fees, and a small Title Fee, all paid to the title company.
They can call those fees whatever they want actually. But the fact is, ownership of the property did not change in any way, shape, form or fashion, nor did you "acquire" anything in addition to the property you owned before the refi. So they're all loan acquisition fees.
Yes, I was thinking the same. It makes sense. Thanks for clarifying and confirming. You really cleared this up for me. Thanks again! I really appreciate it.
