Home loans

Yes, according to IRS Topic 504, points can be deducted under the following conditions:

1. "If you itemize deductions on Schedule A (Form 1040), Itemized Deductions, points which meet certain criteria may be deductible as home mortgage interest. Topic no. 505 and Can I deduct my mortgage-related expenses? provide more information on deducting mortgage interest and points. You can deduct the points to obtain a mortgage on your principal residence, in the year you pay them, if you use the cash method of accounting. This means you report income in the year you receive it and deduct expenses in the year you pay them.
2. The points relate to a mortgage to buy, build, or improve your principal residence (the home you live in most of the time).
3. Your principal residence secures your mortgage.
4. Paying points is an established business practice in the area where the loan was made.
5. The points paid weren't more than the amount generally charged in that area.
6. You provide funds, at or before closing, at least equal to the points charged. You can't use funds borrowed from your lender or mortgage broker to pay the points. However, amounts the seller pays for points on your loan is treated as paid directly by you from unborrowed funds, provided you subtract the amount of the seller-paid points from your basis (purchase price) in your home.
7. The points were computed as a percentage of the principal amount of the mortgage, and
8. The amount shows clearly as points on your settlement statement".