I am refinancing, but I would like to pay off my deferred interest (U.S. $12,000) from the current loan before I get the new loan. Can I do this and be allowed to deduct that interest next year? I have the money to pay it up front, but when I refinance, I would like to take some cash out to replace what I paid out against the deferred interest. Can this be done?
Can I pay my deferred interest before refinancing so that I can deduct it on my '07 taxes next year?
simply put... yes. all mortgage interest paid is a deduction. you may want to call your bank and ask them if you make extra payment whether or not they will apply it solely to your deferred interest or whether they will pay some to principal. Sounds like you are in a neg am loan. i would be happy to help you sort everything out. email me.. if you have more questions.
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