Refinance Origination Fee deductible?

[zguoqin]

Hi,

I know this kind of question has been asked again and again. But because of terminologies, it is still not clear to me if origination fee is deductible. So I know points in refinance is deductible. But in my case, I do not pay points. Still in the Closing Disclosure, there is a dollar amount of origination fee. I am curious if this is deductible?

Thanks!

[ColeenD3]

They are the same thing as points.

Mortgage points paid

If you paid "points" when you refinanced your mortgage, you may be able to deduct them. Points are prepaid interest; you pay them upfront to get a lower interest rate during the period when you're repaying the loan. One point equals 1% of the loan amount, so if you paid 2 points on a $100,000 loan, for example, you would have paid $2,000. Points sometimes go by other names, including:

• Loan origination fee
• Maximum loan charge
• Discount points
• Loan discount

Points paid as part of a mortgage refinance usually must be deducted over the life of the loan. If you refinanced to a 15-year mortgage, for example, then you'd deduct a portion of the points each year for 15 years. This is different from points paid when you first bought the home; points on an original purchase can often be deducted in full in the year they're paid.

[zguoqin]

Thanks for your prompt detailed answers, @ColeenD3 .

Just to clarify, I did not pay points to lower my interest rate (as advertised as no points by lender). So this origination fee still counted as "points"?  

[ColeenD3 · Accepted solution]

Yes. From Rocketlawyer:

You can deduct mortgage interest— such as home loan origination fees, maximum loan charges, and loan discounts— through the point system. One point equals 1% of your mortgage loan amount.