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neworchid
Returning Member

Is Loan Origination Fee tax deductible without a 1098? Lender Statement has Points as blank and a separate line item for Loan Origination Fee as a tiny % of loan amt.

Bought a house last year (for primary residence) but we did not get a 1098 from the original lender (lender sold the loan a month later to another mortgage co).  We paid for "Loan Origination Fees"  which amounts to .162% (or .00162) of the loan amount. 

The lender's closing statement shows Origination Charges broken down into separate lines as follows:

  •  "% of Loan Amount (Points)" as blank 
  •  "Loan Origination Fees" as $xxx ---- (not shown as % itself but when we computed, it's equivalent  to .162% (or .00162) of the loan amount)

Escrow Closing Statement shows "Lender Origination Fee" for the same amount (.162% of loan).  

We do not have HUD-1 or 1098; we're in CA and we're told the HUD-1 is replaced by Closing Disclosure forms.  So our questions are:

  1. Is the Lender Origination Fee tax deductible in this case, even though it is a tiny % of the loan amount?  
  2. How do we know whether our situation satisfies the IRS requirement: "The points were computed as a percentage of the principal amount of the mortgage."?  Does it have to be explicitly stated as a %?
1 Reply
DDollar
Level 4

Is Loan Origination Fee tax deductible without a 1098? Lender Statement has Points as blank and a separate line item for Loan Origination Fee as a tiny % of loan amt.

No, your loan origination fee is not deductible.  In order to be deductible points and loan origination fees must be represented as a percentage of the loan.  Based on your description, the fees are not deductible.

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