Refinancing is the process of replacing your current mortgage with a new loan.
You may want to refinance to secure a lower interest rate, change the type of loan or tap into the equity in your home to fund education, a major purchase or reduce debt.
Refinancing and Your Taxes
Refinancing a mortgage can save you a significant amount of money each month if you get a lower interest rate or longer term or just change the borrowing in some way to access your equity. However, you can also save some money on your taxes by deducting some of the costs you incur during the refinance.
Tax deductions can include mortgage interest, points or money paid to set up the loan and property taxes paid at closing. But be warned. Not all interest is necessarily deductible, nor points or origination fees, or even property taxes. Be sure you get all you deserve and talk with a trained and experienced tax professional to maximize all of your tax deductions if you have refinanced a mortgage.
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