As it stands right now with both properties are personal use. One is your primary residence and the other is your 2nd home.
The cash out amount on home#1 is not debt that will give you a reduction of any tax liability at this time. Only the interest on that portion of the loan that paid off the original loan is deductible.
Example:
At the time of the refinance you owed $100,000 on Home#1. You refinanced for $150,000, paid off the original remaining balance on the first loan and cashed out $50,000. Of your new $150,000 loan the interest on only the first $100,000 is deductible on SCH A as an itemized deduction. So only 66.6% of the interest paid on that new loan is deductible.
The remaining 33.3% of the interest on the $50K cash out isn't deductible anywhere because you did not use that money to buy, build, or improve the home that was used to secure the loan.
That's how it stands "right now". Things change quite a bit if you move into Home#2 as your primary residence, and then convert Home #1 to a rental.
