Mortgage Refinancing - Tax Advantages of Taking Out a New Home Mortgage Loan

If you are sitting on the fence regarding mortgage refinancing, the tax advantages you could gain may be enough to push you over. There are a number of tax deductions available for homeowners ranging from debt consolidation to Private Mortgage Insurance premiums. Here are several tips to help you decide if the tax advantages of mortgage refinancing are right for you.

Mortgage Refinancing For Debt Consolidation

When refinancing your mortgage loan to consolidate your bills you are simply borrowing more than you owe on your current mortgage. The difference between the new loan amount and what you owe on the old mortgage will be paid to you in cash. You can use this cash to pay off your bills and the interest you pay on the mortgage debt is fully tax deductible.

Mortgage Refinancing Because of Private Mortgage Insurance

If you are currently paying for Private Mortgage Insurance and cannot get of paying the premiums, mortgage refinancing may allow you to deduct these premiums from your Federal income tax. This tax deduction is only available for mortgage contracts originated in 2007, which is why you would need to refinance the loan in order to take advantage of it. Additionally, you need to meet the income requirements in order to qualify for the deduction. To qualify fully, your income needs to be less than $100,000. Homeowners with income greater than this but below $110,000 will qualify for a partial deduction. If your income is above $110,000 per year you will have to wait for Congress to extend this deduction to everyone.

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