mortgage points are deductible in the MTP or can I spread over the life of the loan?

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I am a first home buyer time and I’m in a high tax bracket (33%). I wonder if I should accept the points and buy speed, and claim all the points (about $ 11,000) this year, when I come back next year in my file? This is not a mortgage refinancing.

8 Comments
  1. Reply
    Casey J
    May 2, 2011 at 7:06 am

    You spread them over several years – usually three.

  2. Reply
    Tom S
    May 2, 2011 at 7:40 am

    On a purchase, the points are deductible in the year of the purchase. On a refinance, the points are deductible over the life of the loan.

  3. Reply
    bostonianinmo
    May 2, 2011 at 8:07 am

    Tom S has given you an exactly correct answer. Give him the 10 points!

  4. Reply
    ms.chacha
    May 2, 2011 at 8:45 am

    do it claim it on the current yr..its very beneficial to you..you will have the mortgage interest and taxes to write off in the future..

  5. Reply
    ninasgramma
    May 2, 2011 at 9:24 am

    Yes, you are allowed to deduct the points in full in the year you purchase your home. You can also amortize the points over the life of the loan, the choice is yours.

    It may be smart to buy down the rate, but if you remain in the same tax bracket over the life of your loan, the additional interest payments you can deduct if you do not buy down the rate should also be considered. If you buy down the interest rate, you will have less interest to deduct in the future.

  6. Reply
    Abby P
    May 2, 2011 at 9:59 am

    a quick web search came up with lots of results but this is the best one i could find for you.

  7. Reply
    Jaret R
    May 2, 2011 at 10:43 am

    Points are deductible in full on a new purchase and are generally amortized over the life of the loan on a refinance. If you use the funds from the refinance to improve the home, you can deduct them rather than amortizing them. Most often, people are simply refinancing for a lower rate or using the cash to payoff debt, etc. In that case, you must amortize.

  8. Reply
    Judy
    May 2, 2011 at 11:17 am

    On a new purchase, points are usually deductible in the year paid. There is a list of rules you must meet to deduct them in the year paid. On a refinance, you have to spread the deduction of the points out over the life of the loan.

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