Mortgage Refinancing May Restrict Tax Deductions

Homeowners should know that their tax deductions for mortgage refinancing may be somewhat different from the tax deductions that are available after taking out an original purchase money mortgage.

The tax deductions may be restricted, especially if a homeowner is tapping equity through mortgage refinancing. It's what we call a cash-out refinance. On top of this, there are costs associated with mortgage refinancing. If those costs are added to the mortgage balance and not paid out-of-pocket, the unpaid principal balance of the mortgage will increase

I went through a mortgage refinancing about a year after I bought my home. It lowered my interest rate by a full percentage point . . . read more about tax deductions for mortgage refinancing.

More Articles by Elizabeth Weintraub:

• 3 Things to Know About Mortgage Refinancing
  
• Mortgage Refinancing and Home Equity Loans
  
• Tips for Refinancing Your Mortgage

_{©Big Stock Photo}

Technorati tag: tax deductions mortgage refinancing