DDo I tell Bank about HML on property I want to Refi with???

[Ade Adesuyi]

I’m hoping someone can give me a clear answer on this. I have a SFR that I’m starting a cash out refi on. I bought and fixed the property with a HML 9 months ago. After submitting documents to my loan officer, he emails me back wondering why I declared mortgage interest on my tax returns for this property. They must be wondering how this property has mortgage interest if it’s supposed to be “free & clear”. My question is, is it pretty standard for banks to know that these properties are bought with a HML since we’re presenting them under the guise of a “free & clear” status? Do I divulge that I bought it with Hard money or is that a terrible idea? Not quite sure what to do or how to proceed.