Need Advice on How to Finance a Deal

[Shonna Parker]

Hello all, this is my situation and my husband and I disagree on the best course of action. We have a house that is worth $135,000. We owe $40,000 and it will be paid off in 8 years. We just bought a house at an auction for $76,500. After fees, we owe $75,000. Should we do a cash out refinance on the first house to pay for the new purchase, should we try to get a separate mortgage, or should we pay for it using savings. I appreciate any help.

[David M.]

@Shonna Parker

Depends on your personal tax situation. With SALT restrictions, it’s no longer generally better to carry as much loan on your primary residence to max itemizing your deductions. If the loan is on the investment property, you can deduct all the interest payments on that property (against rent or just have the carryover passive losses)

Good luck