Cash-out refinance tax – is there tax to pay on that cash?
Answer:There shouldn't be tax expected on your cash after a cash-out refinance if your new mortgage exceeds the market value of the property, which it probably does. Just the opposite, you may get to deduct the interest from your income taxes in most of the cases.
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However, it will be best if you consult your tax advisor in that case. It is in fact loan money that has to be paid back and is not considered income, but you really should better contact a tax specialist with respect to cash-out refinance taxes.
Our advice: Be sure to ask your lender about FHA loans. FHA loans have very competitive interest rates because the loans are insured by the US Federal Government. Even if you have had serious credit problems, such as bankruptcy, it is easier to qualify for an FHA loan than a conventional loan. Also, taking an FIXED rate loan while the interest rates are still low is a smart idea. Check your eligibility here:
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