Most expenses at closing on the purchase or refinance of a home are added to the cost of a new home. There are a few exceptions - the following would be deductible:
- interest paid at the time of purchase (the charge at closing would normally be done for interest up to the date of first payment.),
- real estate taxes charged to you,
- points (sometimes called origination fees and expressed as a percentage of the amount borrowed.) On a refinance they need to be amortized over the life of the loan or 84 months, whichever is less, unless the points were used to improve your main home.
You can take these deductions even if you borrowed the money to pay them as long as you are legally obligated to repay them.
