Switching mortgage from one property to another?

[Ted Yun]

Hi all --

I have no idea if what I am going to propose is possible, but I was wondering if there was a way to transfer a mortgage to another property.

The backstory is that I relocated for a job, and we spent a while in the market house hunting. Because of the competitive area, we were outbide on a number of deals. We finally settled on a place that wasn't really in the area that we were targeting, but it was adequate. We have a mortgage on this property at a very good rate.

Fast forward about 6 months, and a pretty good deal popped up on a home in the area that we were originally targeting. It was one of those situations where we had to make it work because we felt we would not have this opportunity again (and so far, two years after the fact, our hunch has been correct). So we cashed out stock in order to pay cash for the property. Currently, we are renting out that property.

For tax purposes, we realize that it would be beneficial to switch the mortgage to the 2nd property so that we can expense the mortgage interest and property tax from the income. I was wondering if there was any way to swing this? Is the only way to do this is by refinancing the second property to pay off the first?

Thanks in advance for any advice.

Ted