| Author |
Message |
|
|
Pamila
Guest
|
 Posted: Sun Oct 09, 2005 9:17 am Post subject: Are discount points and loan origination fee tax-deductible? |
|
|
| Are discount points and loan origination fee both tax-deductible?pls advice. |
|
|
 Niicss
Joined: 03 Oct 2005
Posts: 2579
Location: New Jersey
402.93 Dollars($)
|
| Posted: Sun Oct 09, 2005 9:51 am Post subject: RE |
|
|
Hi, Pamila
Lender charges some fee from the borrower at the time of closing and those fees paid are called points. There are 2 types of points: Origination fee and discount points.
Discount points are tax deductible but origination fees or points are not. The Discount Points are deducted under Schedule "A" of the IRS 1040 tax return of a borrower. If a borrower does not itemize his deductions (by taking the Standard Deduction) for other tax-related reasons, he will not be able to deduct the cost of the discount points while filing his tax returns.
It is better to consult with your tax adviser as to whether you qualify for these deductions.
Hope this will give you a complete idea on all the tax related issues.
Thanks
[Edited by Jessica, made minor changes. Thanks.]
Last edited by Niicss on Sun Oct 09, 2005 10:30 am |
|
|
Pamila
Guest
|
| Posted: Sun Oct 09, 2005 10:12 am Post subject: points |
|
|
| But are paying points mandatory? |
|
|
Niicss
Joined: 03 Oct 2005
Posts: 2579
Location: New Jersey
402.93 Dollars($)
|
| Posted: Sun Oct 09, 2005 10:29 am Post subject: re |
|
|
Actually paying points will allow you to lower down your interest rate.
Discount points are actually prepaid interest on the mortgage loan. The more points you pay, the lower the interest rate on the loan and vice versa.
[Edited by Jessica, made minor changes. Thanks.] |
|
|
Niicss
Joined: 03 Oct 2005
Posts: 2579
Location: New Jersey
402.93 Dollars($)
|
| Posted: Sun Oct 09, 2005 10:35 am Post subject: RE |
|
|
Actually point depends on number of factor, such as how much money you have available at closing and how long you plan on staying in your house.
If you plan to stay in your home for awhile, it may be worth reducing the interest rate by paying points.
The best option depends on your needs, but, if you need the lowest possible closing costs, choose the zero-point option on your loan program.
Thanks |
|
|
Pamila
Guest
|
| Posted: Sun Oct 09, 2005 10:59 am Post subject: |
|
|
Hi Niicss
Thanks a lot for the information.  It is really helpful. |
|
|
CBH
Guest
|
| Posted: Mon Jul 13, 2009 5:20 pm Post subject: Origination Fees |
|
|
| Niicss information would be more helpful if it were accurate. Origination fees are tax deductible on your primary home. See the section on Points in IRS Publication 530 |
|
|
gmakerley
Community Mentor
Joined: 09 Nov 2007
Posts: 7129
Location: bloomfield, ct
18.93 Dollars($)
|
| Posted: Tue Jul 14, 2009 8:11 am Post subject: |
|
|
yes, cbh, but it apparently worked well enough back in 2005 for that earlier poster.
_________________
George M. Akerley
Loan Consultant
860-221-5044 |
|
|
