refinancing for property in india

kmurali70 · Joined: 25 Oct 2007 Posts: 2 2.51 Dollars($)

this is tricky..
I have a 30 yr loan on a 225K mortgage which i bought recently and putting a 20% down (Property value = 280K) at 6.375% APR.
I am thinking of refinancing looking at the best possible deal , say 5.75% APR for 30 yr loan.

Also I have a 250K property in india for which I have paid 100K cash.
I have to pay the remaining 150K as loan from a bank in india where the apr is 10% and the tax is not tax deductible since I am US resident.

Instead of taking the loan from india, I am thinking of a cash-out refinancing on my property in the US, say take a loan of 225K + 150K = 375K.

Will I be able to just take the cash for the 150K and do a wire transfer to india to pay off the property in india.

How does the tax deductible work.

Do I have to justify or show outstanding debts to get the cash-out ,

Will the 150k be taxable,

Please let me know.
Thanks

jenkin7 · Joined: 04 Jun 2007 Posts: 939 140.80 Dollars($)

Hello Kmurali,

First and foremost you have to see whether there is enough equity in your home to support the amount that you require.

How long have you bought the property?

If you have purchased the property very recently then I think, you have to talk to your lender and find out if you can refinance.

For a cash-out refinance, you get tax benefits on the interest that you pay for the entire loan amount. So the cash that you receive is not taxable separately.

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