One thing I see, particularly in the examples, is the use of grandfathered debt incurred prior to October 14, 1987. I really haven't seen much of that in these forums this year. But it's use tends to confuse things (at least for me) and produces contradictions. If I just ignore grandfathered debt and go on the presumption all debt was established after Oct 14, 1987 then the way I understand it, is that the percentage of interest that is deductible is equal to the percentage of the loan balance that was refinanced, plus the percentage of the refi that was used to buy, build or improve the home.
As I understand it, it's perfectly possible for the percentage of deductible interest to increase say, 2 years later if at that time you use the cash out money to improve the home. But until then, the percentage does not change.
Now with grandfathered debt that's a different story, and a story that I'm having a hard time grasping in it's entirety. But the reason I'm not worrying about it all that much is because at this time grandfathered debt would be well over 30 years old. (33 years as of Oct 2021). I figure a majority of those homes originally refinanced in or before 1987 would have been sold under a new mortgage by now. Though I do recall seeing one (and only one) where the home was originally purchased prior to 1987. But even that one the refi amount including the cash out, was well below $750K. So for that one the rules as they applied to the grandfathered debt part, didn't seem to change anything of any significance.
