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Bob78164: "Thanks, JAFO31. Whew is right; the house isn't appreciating that rapidly. By the way, when we purchased, the sellers carried back a mortgage for 10% of the purchase price. We used the refinance to pay off the second. Since the second mortgage was purchase money debt, I assume that the amount outstanding on the second does not count against the $100,000 limit (not that it matters in my case). Am I right? --Bob"

Yes. Purchase money is purchase money, regardless whether it is a first or a second.

Regards, JAFO

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