I have origination fees; appraisal fees; credit report fees; flood certification fees; mortgage insurance; title services; government recording fees and required services that I can ship for fee.
We brought money to the table to refinance with a reverse mortgage to eliminate mortgage payments going forward. We paid more than the closing costs, so aren't they considered paid now how about origination fee and initial interest payment(s)? Does this mean we can deduct anything?
Sorry, but none of those are deductible (and most wouldn't be if it were a standard mortgage.)
In most instances, reverse mortgage interest and costs are not deductible. From IRS Publication 936
"Reverse mortgages. A reverse mortgage is a loan where the lender pays you (in a lump sum, a monthly advance, a line of credit, or a combination of all three) while you continue to live in your home. With a reverse mortgage, you retain title to your home. Depending on the plan, your reverse mortgage becomes due with interest when you move, sell your home, reach the end of a pre-selected loan period, or die. Because reverse mortgages are considered loan advances and not income, the amount you receive is not taxable. Any interest (including original issue discount) accrued on a reverse mortgage is not deductible until you actually pay it, which is usually when you pay off the loan in full. "
On my mortgage insurance papers it lists charges for mortgage insurance premium, servicing fee and interest. Are any of these tax deductible?
Interest on your reverse mortgage is not deductible, unless and until you repay the loan in full. The exception is any origination fees paid in cash at the outset. Even if you pay off your loan, your deduction may be limited because a reverse mortgage loan generally is subject to the limit on Home Equity Debt.
However, for reverse mortgages, you can deduct amounts you paid for qualified mortgage insurance.
For more information, please refer to IRS publication 936, page 8.
Can I deduct on my taxes any charges to obtain a reverse mortgage
There are some items you can deduct for a reverse mortgage such as qualified insurance payments and any origination fees if paid in full at the onset of the loan. Reverse mortgage interest would be deductible when paid. This typically occurs once the loan is paid off.
For more information, see the link below: