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consolidating business and personal debt by refinancing using personal residence

mickey
Level 4

Hi 

I have a client who asked if he should refinance his house to pay off the line of credit and a mortgage for his business building.  

He has an LOC  and a first mortgage on this building where his business sits.

Questions:

1.  Is this allowed?  

2.  Would he be limited to interest deduction of up to $750K of mortgage balance if he decides to refinance?  The properties (home and business building) were purchased before the 2017 tax law change.  

Thank you

 

 

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1 Comment 1
sjrcpa
Level 15

You can refinance your house and use the money for whatever you want.

He's not going to get the $750K limit for home mortgage because it won't be used to buy, build, or improve his principal residence.

 


Ex-AllStar