Tax Implication of refinancing and consolidating loans
Hi everyone,
I sincerely apologize if this question has been posted and addressed. I am in my first year of owning an investment property and so far everything has been great. When my wife and I purchased the property last year we took out a home equity loan with our bank at 4.06% 30 year term so that we could purchase the property outright in cash. Currently we still have a first mortgage on our home with 6 years left at a rate of 2.99%. Because interest rates have reached a new low, I have been thinking of refinancing the home equity loan to 10 year term. The "problem" that I have is that the institutions that I'm talking with insist on consolidating the two loans. I can get a 2.25% 10 year loan with minimal closing costs. If i do this, what is the tax implication? I can track my business interest expense via the home equity loan since its itemized for this specific purpose. Will I still be able to do this if I do decide to consolidate the two loans?
Any advice would be appreciated.