The IRS considers Home Mortgage Points to be charges paid to take out a mortgage. They may include origination fees or discount points, and represent a percentage of your loan amount. To be tax-deductible in the same year they are paid, you have to meet the following four conditions.
- The mortgage must have been used to buy or build your primary home.
- The points paid were normally priced for the area.
- You can prove that you or the seller paid the points.
- The amount is shown on your closing disclosure or settlement statement.
Points charged for specific services, such as preparation costs for a mortgage note, appraisal fees, or notary fees aren't interest and can't be deducted.
Enter the total dollar amount paid as points in the mortgage interest screens if they qualify.
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