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jfruh
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- Posted It does, thanks! on Deductions & credits. June 4, 2019 9:11 PM
- Posted (also we don't have private mortgage insurance, so that d... on Deductions & credits. June 4, 2019 9:11 PM
- Posted Hi Scott! Thanks for the answer, but I'm not quite sure h... on Deductions & credits. June 4, 2019 9:11 PM
- Posted If I roll refi charges into a mortgage, will interest on that mortgage still be fully deductible? on Deductions & credits. June 4, 2019 9:11 PM
June 4, 2019
9:11 PM
(also we don't have private mortgage insurance, so that doesn't apply in this situation.)
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June 4, 2019
9:11 PM
Hi Scott! Thanks for the answer, but I'm not quite sure how it applies to my situation. I think I see the source of the confusion, so let me explain: The refi hasn't happened yet -- it hopefully will close later this month -- and we bought the house in 2016, so 2017 tax year isn't relevant at all. Let me give some simplified numbers to get at what I'm asking. Say we right now have $400,000 on the fixed-rate mortgage and $50,000 on the HELOC. As noted, this is all acquisition debt (and yes, I understand that some of the mortgage origination fees from the original purchase of the house are ultimate part of that.) So, say next week we refi. We don't get any cash out, but there are $5,000 in fees that get rolled into the new loan. So we end up with a new fixed-rate mortgage of $455,000. My question: is all of our mortgage interest on this new loan deductible going forward? Or do I have to exclude part of the interest (about 2 percent) representing the fees, until the loan balance gets back down to $450,000?
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June 4, 2019
9:11 PM
Hello all! Currently we own a home where we have both a fixed-rate mortgage and a variable-rate HELOC. We have the HELOC for complicated reasons that I can go into if necessary but both loans are wholly acquisition debt -- all the money went to buying the house, and we have never taken any cash out of the HELOC since. Since the HELOC is variable rate and only has a 10 year term, I am now trying to refinance things to get the complete debt onto one 30-year fixed loan. It looks like I will be able to do this, but in the process will need to roll some of the closing costs of the refi into the loan itself. I know that, under the new tax law just passed, you will only be able to deduct interest on the portion of your mortgage or HELOC that represents "acquisition debt." My question is: will the amount added to the loan by the refi costs trigger this provision? That is, will I only be able to claim interest on the amount of debt that I had before the refi, and will need to exclude the extra debt from the refi charges until I pay that part down? I know this is new law and may not be entirely clear yet. Thanks in advance for any guidance you can offer.
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