@popadoc45 - while I agree with all stated by others, the issue isn't with the cash-out being taxable, the issue is how much of the interest is tax-deductible going forward
if that $12,000 is being used to substaintially improve that same home, then the interest on the $12,000 is going to be deductible,
but if you are just pocketing the money and not re-investing it back into your home. the related interest is not deductible. As the new loan amortizes down, this first $12,000 is paid back first, so it won't be that many years of determining the non-deductible portion of the interest.
