- Interest on refinanced mortgages that are taken out for expenses not related to home improvement can also be taken as a deduction, but only within certain guidelines. Currently, the maximum deduction for the life of the loan is $100,000. (Married couples filing separately each have a maximum of $50,000.)

- Points on a refinanced home mortgage are still tax-deductible in most cases.

Benefits Beyond Tax Savings

No one would complain over having a few extra dollars in their pocket. Not only can financing your home save money on your next tax return, but it can also save money on purchases made using money received from refinancing a mortgage (or simply money not lost to rent). In fact, paying off credit cards after financing can be one of the smartest financial moves you can ever make—especially if you keep those cards paid off.

Consider that even the worst mortgage interest rates can be at least ten or twenty percentage points lower than those for the average credit card. People with poor credit are often better off with a higher mortgage interest rate if it means their other debt can be reduced, thereby bringing their credit score up. After re-establishing their credit, they can then refinance their home at a better interest rate.

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