Refinance under $375,000 with cash out

[mbick96]

In 2020 we refinanced for $270,000 part of which was a cash out, so we had two 1098s as expected. I have two questions on this.

Question 1: When going through TT it says with multiple 1098s and a refi amount of $375,000 or more to follow the given instructions. What to do if the refi was less? Do we follow the same steps? (Image from help below).

Question 2: For the cash out portion we used one third to pay for improvement work on the house in 2020. Am I correct that we do not include the interest from the other two thirds?

Thank you

[DaveF1006 · Accepted solution]

Since your mortgage is not $375 or higher, this notice would not apply to you. Also, you will only use the mortgage interest amount that was used to improve the house and not include the interest for the remaining 2/3's.

[Tony B]

What process would I follow. How do I enter refinance information and receive credit form old mortgage and new?

[DaveF1006]

it depends. Did you take cash out at the refinance?

[snjpromos]

I have a question along these lines also.

We refinanced our original mortgage in 2020 with the same lender. So, I have a 1098 from the original loan and a 1098 from the refinanced loan both from the same lender.  I entered my 1098 from the original loan first.  When it asks me "Was this loan paid off or refinanced with a different lender in 2020?" should I answer Yes or No?  The loan was refinanced but it was refinanced with the same lender. 

In our refinance we did get cash out that was not used for home improvements.  So when I enter my second 1098 from the refinance do I just make sure that when it asks what money was used for the home - I just put the amount that was used to pay off the original loan?

[AmyC]

1. Yes, paid off.

2. Yes, only money for buying and improving the house count.

@snjpromos