Excess funds from a refinance / new purchase

I'm purchasing a new investment property and refinancing an existing investment property to take some equity out to cover the purchasing costs of the new one. Upon doing all the settlement calculations, we've ended up with excess borrowed funds. I am yet to settle, but want to make sure the money gets banked correctly so as not to contaminate the funds.

Questions:

1. I put in a deposit of $13500 (from my post-tax funds) when I exchanged contracts. Can this amount be taken out from the excess borrowed funds or will that contaminate the tax deductible money? I assume the answer is no, I can't take it out, but want to double check.
2. Where does the excess borrowed funds need to go in order not to contaminate the money? Does it need to go straight into the loan of the refinanced IP or straight into the loan of the newly purchased IP?

 

1. contaminate
2. technically it will be a mixed loan at settlement and if you repay into the loan you would be further mixing and reducing the deductible debt. Where the amounts are small it doesn't matter too much but this is larger amounts.


You should seek your own tax advice