Thank you. I'm still not clear what I'm losing on tax write-offs if I get the funds via a cash out refi or a new loan. Can you advise? I only plan to take the dollar value on the cash out refi that is required to purchase the investment property. I want to know if taking out a new loan or doing a cash out refi has better tax advantages? I know that the interest rate is better on a cash out refi so I want to understand specifically what deductions I am giving up by doing a cash out refi against my primary residence in order to purchase an investment property.
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Primary Residence: Remaining Principal: $100k Purchasing an Investment Property that requires Non-Warrantable Loan: Loan Amount $240k Primary Residence Appraisal Value: $500k Option 1: Cash out refinance on primary residence and use excess cash to purchase investment property condominium Option 2: Take out a new mortgage (non-warrantable loan) for the investment property The interest rate of a cash out refinance is lower than if I were to take a new mortgage for the investment property, but am I missing out on any tax write-offs by adding the investment loan to my current primary residence loan? Am I still able to write off all loan origination/closing costs, etc.? What option should I do? What am I giving up, if anything? Thanks!
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