You "settle" or "close" your mortgage refinancing when you sign all the paperwork to officially take out the new loan and pay off the old one. A number of fees and charges may be applied at settlement. These closing costs can add up to hundreds or thousands of dollars and may include such things as:
- Appraisal fees
- Attorney fees
- Inspection costs
- Legal and recording fees
These costs are generally not deductible in a mortgage refinance if they're for your residence. They are not included on your tax return. Keep track of the costs and you can add them to the home's basis so when you sell the home, you will have less of a gain.
Generally, mortgage interest is tax deductible, meaning you can subtract it from your income on your tax return. When you use TurboTax, it helps you decide which option—itemizing or the standard deduction—will save you more money. At year's end, your mortgage lender sends you a statement, called Form 1098, explaining how much you paid in interest during the year. @dmhamel
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