http://www.irs.gov/publications/p936/ar02.html#d0e2069
Explains debt limits for interest.

"Dan Krueger" wrote in message
.net...
Bill McKee wrote:

But I understand the IRS rules say only hte money up to the purchase
price of the house is legally deductible.

It's a home EQUITY loan. Not much different than a refinance based on the
CURRENT value of the home where cash is taken at the closing. Where did
you read that?