After further research, I believe the previous answer shown above was incorrect.
According to the IRS Publication 936, the correct way to handle the remaining point from the old loan when you refinance with the same lender is to continue amortization of the points through the life of the new loan.
Here is the exact wording from that document:
Mortgage ending early.
If you spread your deduction for points over the life of the mortgage, you can deduct any remaining balance in the year the mortgage ends. However, if you refinance the mortgage with the same lender, you can't deduct any remaining balance of spread points. Instead, deduct the remaining balance over the term of the new loan. A mortgage may end early due to a prepayment, refinancing, foreclosure, or similar event.
@drmorello
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
