Mortgage Points on Second Home

[Lindas0248]

I bought a second home in 2023.  The original bank sold my loan to a second mortgage company in same month as closing.  on settlement statement, I paid points and origination fees that were less than down payment.  Having read the publications, I cannot find anything that talks to whether I have to amortize the points or whether I can take full deduction in current year.  Because it is a second home, it states I must amortize; however, I do not have loan with original bank.  I only have loan with the bank the original bank sold the loan.  It was not a refinance.  Please advise.  Can I take the total amount of points and origination fees this year?  

[JotikaT2]

Since the points were incurred on your second home, they cannot be fully deducted in the year paid.  

You will need to amortize the points and origination fees over the life of your loan per IRS Publication 936. 

[Lindas0248]

I understand your response, but I believe I may not have been clear in that loan was paid off by second bank to original bank where points and origination fees were gleaned They sold to second bank where I incurred no points or origination fees.  So isn't original loan  considered paid off to original bank and therefore life of loan ended and therefore total can be taken and not have to amortize since life of original loan ended.  If I am wrong, please show me in pub 936 where you are obtaining your info.  I understand it is second home, but the issue is whether the fees need to be amortized over life of new bank loan when there were no fees incurred.

[RobertB4444 · Accepted solution]

Your loan was sold, it was not paid off or refinanced or anything else.  None of the terms of your loan have changed, you didn't have to sign any new loan paperwork, you didn't even get asked.  Your loan is the exact same loan that you always had except that the loan servicer changed.  

You must amortize the points over the life of the loan.  

@Lindas0248