Yes, a portion of the loan origination fees and the VA fee can be used in 2017. Any loan proceeds that were additional to buy, build or improve the home are deductible in 2017. The balance that is used to pay off the original loan has limitations.
The points/loan
origination fees and the VA fee on a refinanced loan have limitations.
- If there are
loan origination fees on a refinanced loan they will have to be amortized
over the life of the loan to the extent there was not
additional funds used to buy, build or improve the home. If extra
money was borrowed to buy, build or improve the home the points attributable
to that portion can be deducted in the year of the refinance, while the
rest of the points should be deducted over the life of the mortgage each
year until it ends.
- Loan or
mortgage ends. If
your loan or mortgage ends, you may be able to deduct any remaining points
in the tax year in which the loan or mortgage ends. A loan or mortgage may
end due to a refinancing, prepayment, foreclosure, or similar event. However, if
the refinancing is with the same lender, the remaining points generally are not
deductible in the year in which the refinancing occurs, but may be
deductible over the term of the new mortgage or loan. Simply
divide the total or adjusted amount by the number of months of the life of
the loan.
This needs to be tracked until the loan is paid off.
Points (Loan origination fees). The term “points” is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points.
General Rule. You generally can't deduct the full amount of points in the year paid if they are a usual practice in your area and the loan is used to buy, build or improve your main home.
For more information you can click the hyperlink here: IRS Publication 936-Home Mortgage Deduction
VA funding fee or Rural Housing Service funding fee appears to be an item that had been expired on December 31st, 2016, and has now been extended to 2017.
You can enter this information using the steps below.
- Select the Federal tab in the navigation bar left
- Select Deductions and Credits
- Select Mortgage Interest (Form 1098)
- Continue to review your entry for both interest, Mortgage Insurance Premiums/VA Funding Fee and property tax
- Click the image to enlarge and view for assistance.
[Edited: 04.04.2018 | 7:30 AM]
