What Is a Grandfathered Loan?
When you refinance a grandfathered mortgage, the mortgage interest remains deductible only if the principal balance of the new loan doesn’t exceed the principal balance of the old loan. Take a homeowner with a mortgage that was taken out last year for $1 million but now has a balance of $950,000.
When to deduct interest on a grandfathered mortgage?
Refinancing grandfathered mortgages When you refinance a grandfathered mortgage, the mortgage interest remains deductible only if the principal balance of the new loan doesn’t exceed the principal balance of the old loan. Take a homeowner with a mortgage that was taken out last year for $1 million but now has a balance of $950,000.
What are the new rules for refinancing a mortgage?
Homeowners who refinance a mortgage will also need to consider how the new rules impact them. The TCJA includes a second grandfather rule for refinancing up to $1 million of home acquisition debt that was taken out before December 16th, 2017.
Can you deduct mortgage interest on a refinance?
Taxpayers that refinance grandfathered debt, are allowed to deduct mortgage interest on the new debt in full, up to the amount of grandfathered debt outstanding just prior to the refinance.?
