Origination Fees on Mortgage for a new home (Primary Residence)

[mathaidinu]

I wanted to know if the amount stated as Origination Charge in our HUD 1 is tax deductible

801 - Our origination charge Includes Origination Point (% or ) $ 2,471.50
802 802. Your credit or charge (points) for the specific interest rate chosen $ 0
803. Your adjusted origination charges to . (from GFE #A) 2,471.50

Later in the HUD 1 , the above amount is broken into two

Origination Fee - 1197.5 (this appears to be 0.50% of the principal loan amount)
Commitment Fee - 1274. 50

How much of this is tax deductible ?

[SuzanneD · Accepted solution]

Not all "origination" fees qualify as deductible.  If they qualify, they should be reported on Form 1098.  Your closing statement (Form HUD-1 is generally used for that) would show this near the top of the second page.

The origination charge you paid is generally deductible.  To enter the origination charge in your TurboTax return, go to >Deductions and Credits >Your Home >Mortgage Interest and Refinancing (This section also covers new loans).

Add your bank name and click Continue. The next screen says "Tell Us More About Your Loan".  Check the box for "This is a new loan on which I paid points" and any other options that apply to your situation. Enter the interest from the 1098 (box 1) and click continue.  Then enter the origination fees (points).

At closing you paid daily interest that is on the closing statement.  If that amount is not already in your 1098, you can add it. 

You can deduct any "points", which are a form of advance interest that you pay to get a lower rate.  But, whether you can deduct them as a lump sum or spread out depends on several factors.  If you check the box for "I paid points" then TurboTax will figure it out for you.

If there are other origination fees that are specifically a percentage of the loan amount (like a 1% origination fee) that counts as points.  But any other fees, like application fee, survey, credit check, etc, are not deductible.

[mathaidinu]

Thanks for the detailed response. One more question in my case the Origination fees mentioned in line 803 of HUD 1 were paid to the lender, but mortgage payments were paid to another servicing agent. So form 1098 issued by service agent doesnt have any "points" mentioned in them.

[cassie-mack]

same problem, what did you deduct if it was not on 1098?

[chaparra1220]

Same problem

[kvnsrinivaskumar]

Any one got the right answer ? are processing and underwriting fee tax deductible ?

[larryburris]

No, they are not.