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larrycbaker
New Member

On my residence refi some paperwork shows points but the 1098 does not have points Also is the VA loan fee deductible?

Do I deduct the points from the paperwork?
Is the VA loan fee deductible?
1 Reply
LisaBr
New Member

On my residence refi some paperwork shows points but the 1098 does not have points Also is the VA loan fee deductible?

The VA loan fee is deductible under Mortgage Insurance.

If you paid Points/Loan Origination that qualifies, you can deduct them even if they aren't  reported on you 1098.  Pay close attention to item number eight below. [From:  https://ttlc.intuit.com/questions/3017785-origination-charges-not-reported-on-1098]

If you paid Points/Loan Origination that qualifies, you can deduct them even if they aren't  reported on you 1098.  Pay close attention to item number eight below.

According the IRS, Publication 936-Home Mortgage and Interest Deduction.

"You can fully deduct points in the year paid if you meet all the following tests.

  1. Your loan is secured by your main home. (Your main home is the one you ordinarily live in most of the time.)

  2. Paying points is an established business practice in the area where the loan was made.

  3. The points paid were not more than the points generally charged in that area.

  4. 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. Most individuals use this method.

  5. The points were not paid in place of amounts that ordinarily are stated separately on the settlement statement, such as appraisal fees, inspection fees, title fees, attorney fees, and property taxes.

  6. The funds you provided at or before closing, plus any points the seller paid, were at least as much as the points charged. The funds you provided are not required to have been applied to the points. They can include a down payment, an escrow deposit, earnest money, and other funds you paid at or before closing for any purpose. You cannot have borrowed these funds from your lender or mortgage broker.

  7. You use your loan to buy or build your main home.

  8. The points were computed as a percentage of the principal amount of the mortgage.
  9. The amount is clearly shown on the settlement statement (such as the Settlement Statement, Form HUD-1) as points charged for the mortgage. The points may be shown as paid from either your funds or the seller's"             

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