First question. You entered the points accurately and do not duplicate. Second question does not matter. The third question might be based on how you answered questions about the refinance. Was this a Cash Out refinance? What you did with the money? Here is some information that will assist you.
It’s important that we go over exactly how cash-out refinances work before we look at how the IRS views the money you get from this transaction. Basically, you replace your existing mortgage with a loan that has a higher principal balance. Your lender then gives you the difference in cash. You can use the money from a cash-out refinance for almost anything. Many homeowners use it to consolidate debt or make home improvements.
The cash you take out of your equity during a refinance isn’t considered income by the IRS. However, there are limitations on deductions that you can take when you refinance your loan. You may only discount interest you pay on your new loan if you use your cash to make a capital improvement on your property.
Something to keep in mind is that refinancing your mortgage can significantly reduce your total tax deductions. Refinancing to a lower mortgage rate means you'll be paying less interest, which means you'll have less mortgage interest to deduct when tax time comes around. The difference can be substantial.
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