Are Origination Points Tax Deductible. To deduct points as mortgage interest you must pay points only for the use of money. Interest buy down points also known as.
Deductible and Nondeductible Examples. Who Qualifies for a Deduction. One point equals 1 of the loan amount so if you paid 2 points on a 100000 loan for example you would have paid 2000.
Points paid as part of a mortgage refinance usually must be deducted over the life of the loan.
One point equals 1 percent of the total refinance mortgage amount so on a 200000 loan with two points the borrower would have to pay 4000 in fees. Points may also be called loan origination fees maximum loan charges loan discount or discount points. You cant even add them on to your cost to reduce your capital gains tax liability when you sell. Points paid as part of a mortgage refinance usually must be deducted over the life of the loan.
