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tk659
Returning Member

cash out mortgage refinance to pay off student loans

For a mortgage that was refinanced where the proceeds are used exclusively to pay off student loans does the interest on the new loan  need to be broken out into the two components; 1) the old mortgage amount and 2) the student loan amount or just reported as all "mortgage" interest. 

 

The proceeds were applied directly to the loan servicer, no part of the cash out was distributed to the borrower.

 

If I follow the interview and list the portion of the new loan that was the old balance in the mortgage interest worksheet, the interest on schedule A is reduced by the amount that would correspond to the student loan amount. There seems to be no good place to enter the interest for the student loan amount separately.

 

 

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1 Reply
DMarkM1
Expert Alumni

cash out mortgage refinance to pay off student loans

Yes, you are correct enter the refinance as you have done to exclude the loan proceeds not used on the secured home.  Next navigate back to the "Deductions and Credits" section and scroll down to the "Education" topic.  In the dropdown you will find "Student Loan Interest Paid."  You should get a form 1098-E that you would use to enter the information.  

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