# Mortgage Points?

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I plug House on March 6 and just got my 1098 from the mortgage company. There is a section 2 (a mortgage, point) the amount of \$ 6200, not all of which paid me. The builder paid \$ 3500 sealing kulud.Kui I remember correctly and it will show it to my mortgage, my speed was 5.875% w / 0.875% of the loan is equal to me = my company \$ 1875.Kuidas mortgage loan for \$ 6200, and for how much is my real point behind?
Maybe someone can help me here. We’re lining up the financing to buy a house, and for various reasons, we expect in the course of next 1-2 years to refinance the mortgage market jooksul.Kuna things are so crazy right now, we are unable to find loan of less than 1.75, respectively. What makes me mad, because if we refi soon because we throw money we pay võrra.Püüan be creative. What if we funded a loan for these items? It would put more money in contributions to the fund (essentially the same amount of money we would have paid in points). But we could not get the deposit money back if we refi? Unlike points, which are essentially gone nurjas.Kas it makes sense? What am I missing? And not, as some of the complexity of our situation, we are quite unable to find points of the loan less. This is not the solution. We’re stuck.

bostonianinmo
February 4, 2011 at 12:43 am

If it lists the points as \$ 6,200 then that’s what you’re entitled to. They were either paid by you or on your behalf from the pool of funds at closing. The closing agent and the mortgage company probably did some “smoke and mirrors” with the numbers to give you the biggest deduction but it’s all legal.

Rob
February 4, 2011 at 1:26 am

Topic 504 – Home Mortgage Points

The term “points” is used to describe certain charges paid to obtain a home mortgage. Points may be deductible as home mortgage interest, if you itemize deductions on Form 1040, Schedule A (PDF). If you can deduct all of the interest on your mortgages, you may be able to deduct all of the points paid on the mortgage. For information on deducting interest, refer to Topic 505.

You can deduct the points in full in the year they are paid, if all the following requirements are met:

Your loan is secured by your main home (your main home is the one you live in most of the time).
The points paid were not more than the amount generally charged in that area.
You use the cash method of accounting. This means you report income in the year you receive it and deduct expenses in the year you pay them.
The points were not paid for items that usually are separately stated on the settlement sheet such as appraisal fees, inspection fees, title fees, attorney fees, or property taxes.
You provided funds at or before closing, that were at least as much as the points charged, not counting points paid by the seller. You cannot have borrowed the funds from your lender or mortgage broker in order to pay the points.
The points were computed as a percentage of the principal amount of the mortgage, and
The amount is clearly shown on your settlement statement.

Points that do not meet these requirements may be deductible over the life of the loan. Points paid for refinancing generally can only be deducted over the life of the new mortgage. However, if you use part of the refinanced mortgage proceeds to improve your main home and you meet the first six requirements stated previously, you can fully deduct the part of the points related to the improvement in the year you paid them with your own funds. Points charged for specific services, such as preparation costs for a mortgage note, appraisal fees or notary fees are not interest and cannot be deducted. Points paid by the seller of a home cannot be deducted as interest on the seller’s return, they are a selling expense which will reduce the amount of gain realized. Points paid by the seller may be deducted by the buyer provided the buyer subtracts the amount from the basis, or cost, of the residence. Points you pay on loans secured by your second home, can be deducted only over the life of the loan. You may be subject to a limit on some of your itemized deductions, including points, for more information on the adjusted gross income limitations please refer to the Form 1040 Instructions.

For more information on points, refer to Publication 936, Home Mortgage Interest Deduction
For further information call the Internal Revenue Service at
1-800-829-1040

americanfreeman
February 4, 2011 at 2:22 am

Keep looking. Lots of mortgages out there with zero or one point. Try lendingtree.com

Antwan DUBBA U
February 4, 2011 at 3:09 am

Well, there are 2 types of Points. upfront Point. Thats what your talking about , and back end points, that are in your rate that you dont know about> If you talk logical witha lender, just tell them, i need every penny of my equity and I dont want any up front broker fee or loan origination fee ( up front points) Tell them the most they are going to get out of you in 1 point in Yeild Spred ( back end points) Then you should be fine, The company I work for only charges 1 point on every loan, GOOD LUCK !!

OMG DO NOT GO ON LENDING TREE>COM they sell your info to 5 banks.. Lending tree is not good, i worked for a company that purchased leads from lending tree, you will get so many calls it will make you crazy and they sell to some shady banks. STAY AWAY FROM LENDING TREE!!

historybuff
February 4, 2011 at 3:20 am

I guess but wouldnt you still be paying that money in the long run? I mean if you refinance and your have equity of like 30,000\$ you have to weight out how much it will cost to refiance.. 3,000\$ in closing or more higher or lower interest rate and points which can really range…
I have seen loans with higher interest rates and no points, so i guess it depends on how long you plan on spending in this house if it is worth it for you

John
February 4, 2011 at 3:27 am

Do not go into this home planning on a refi soon. The market is still going down in most places. Look at an amorization schedule at http://www.hsh.com to see what little your payments will knock off your balance. Unless you are putting a lot down or planning to make a lot of extra payments then don’t count on it. Most of your payment goes to interest. I think that lenders will only refi up to 80% of the value of your home. You can possible loose 20% of the value of your home. Also, what if the interest rate goes up.
This is why we are in this mess in the first place. People assumed that they will be able to refi but couldn’t.

donfletcheryh
February 4, 2011 at 3:57 am

You would probably be best to get your down payment large enough to remove those points from consideration. The exception is that in a hot market you might be hurt by rising prices while building up a down payment.

In a market weakness period, it is unlikely that buying early will avoid a problem, other than the need to rent, perhaps store furniture.

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