Posted on: 06th Feb, 2011 02:05 am
mortgage $50,000 on rental property / c/c debt $30,000
i am thinking to do cash out refinance, and put mortgage
& c/c debt together ($80,000).
question: can i use interest amount from cash out refinance on rental property tax deduction? or i can use interest amount on only $50,000(original mortgage amount on rental property) or, i can not use any interst amount on cash out refinance.
question: cash out refinance = refinance or cash out refinance = receive cash as income and i need to pay tax on $80,000. in this case, i do not understand benefit for cash out refinance.
i am thinking to do cash out refinance, and put mortgage
& c/c debt together ($80,000).
question: can i use interest amount from cash out refinance on rental property tax deduction? or i can use interest amount on only $50,000(original mortgage amount on rental property) or, i can not use any interst amount on cash out refinance.
question: cash out refinance = refinance or cash out refinance = receive cash as income and i need to pay tax on $80,000. in this case, i do not understand benefit for cash out refinance.
Hi shinoshino,
You should have at least 20% equity in your property in order to get a cash out refinance. Unless you have equity in your property, none of the lenders will be ready to offer you a refinance.
When you go for the option of cash-out refinance, you will be able to avail more cash than your unpaid mortgage balance. This additional amount is considered as taxable income. Thus, you may have to pay taxes on it.
You should have at least 20% equity in your property in order to get a cash out refinance. Unless you have equity in your property, none of the lenders will be ready to offer you a refinance.
When you go for the option of cash-out refinance, you will be able to avail more cash than your unpaid mortgage balance. This additional amount is considered as taxable income. Thus, you may have to pay taxes on it.