There will be indeed a time when you’ll be surrounded by multiple thoughts while sitting on a fence making decisions regarding mortgage refinancing. But after looking the numerous tax benefits associated with refinancing mortgage, you will definitely make your mind of having it. There are enough tax advantages available for borrowers ranging from debt consolidation to refinancing points. Following are the tax deductions you can avail, if you were involved in refinancing mortgage loan;

• Debt consolidation: In the process of refinancing mortgage, you borrow more than you owe on your existing mortgage to consolidate your current bills. Whatever difference between new loan amount and you owe on previous mortgage will be handed over to you. By using this cash you can pay off your existing bills and the interest amount you pay on debt is completely tax deductible.

• Mortgage interest: It is possible for you to deduct interest charged on refinance, if your loan refinance amount is less than or equal to your previous mortgage. In case it is more, then interest charged is deductible on the extent of previous mortgage plus additional $50,000. Married couples can file joint returns and get deduction on interest of the previous mortgage plus additional $100,000 as a cumulative advantage.

• Refinancing points: In case, you are paying discount points in order to reduce refinance interest rate, then you can abandon those points over life of the refinance. This is not like your previous mortgage where all points were deducted cumulatively when you get out of loan. For every point, you are able to deduct one percent of entire value of the mortgage.

• Undeducted points: In case, you have some points which you were not able to deduct, then you can subtract those points when you get another refinance loan. So if you are planning to take one more refinance loan in future you should keep record of the points, which you are not using in current refinance mortgage.

Above tax benefits in refinance will definitely attract you for mortgage loan. But it is also necessary to understand various complications involved in tax filing process. So it is good to take advice of any tax consultant, who will not only make you understand intricacies involved in tax deduction process but also help you in utilization of tax benefits up to maximum extent.