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Several clients have refinanced their homes this year.  The new mortgage is the balance of the old loan AND the refinance costs.  This method results in a new balance that is higher than the old loan balance.  My question is:  does this method result in non-deductible mortgage interest because the new loan balance is higher than the old loan balance?  I been searching for an exception of the old balance and new balance being an exact match and can't find it.  Am I missing something or do I have to treat the refi costs as generating excess interest?

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