Solved: Are Settlement Charges to Borrower on a closing statement "points" for the mortgage loan?
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Are Settlement Charges to Borrower on a closing statement "points" for the mortgage loan?

These were not reported on the 1098 mortgage interest statement.. Can settlement charges be deducted?
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Are Settlement Charges to Borrower on a closing statement "points" for the mortgage loan?

I have listed out the closing costs/settlement charges that would be deductible on your return. You can find the settlement charges listed out on your Settlement Statement/HUD1.

The closing costs that 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, and

  • private mortgage insurance costs but, if prepaid, only the amount allocable to this year based on an 84 month amortization.

Title fees, real estate commissions, appraisal costs, home inspections, documentary stamps, credit report costs, costs of an abstract, transfer taxes, flood certificate, attorney fees, etc. are not deductible, but are added to the cost of the property.


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Highlighted
New Member

Are Settlement Charges to Borrower on a closing statement "points" for the mortgage loan?

I have listed out the closing costs/settlement charges that would be deductible on your return. You can find the settlement charges listed out on your Settlement Statement/HUD1.

The closing costs that 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, and

  • private mortgage insurance costs but, if prepaid, only the amount allocable to this year based on an 84 month amortization.

Title fees, real estate commissions, appraisal costs, home inspections, documentary stamps, credit report costs, costs of an abstract, transfer taxes, flood certificate, attorney fees, etc. are not deductible, but are added to the cost of the property.


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Are Settlement Charges to Borrower on a closing statement "points" for the mortgage loan?

Thanks, I did some more searching and found your answer. Saved a big mistake!
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