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Mortgage Points

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mopowers
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Mortgage Points  Reply with quote  

While reading a recent yahoo article, I noticed this particular statement:

"Points paid during a refinance can be deducted over the life of the new mortgage loan."

Here is the whole article:

http://finance.yahoo.com/banking-budgeting/article/111039/9-things-to-Know-before-you-refinance-your-mortgage?mod=series-m-article-b

What does it mean when it says that points can be deducted for the
life of the loan? It sounds like the points can be deducted every year. This isn't true is it?

Thanks!
Post Mon Oct 18, 2010 6:45 pm
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coaster
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The points are amortized over the TERM of the loan, and you get a deduction for the allowable points each year you hold the loan. When the loan is paid off, you get the balance of the points due. I believe, if I'm not mistaken, this is actually a required way to deduct points on a refinance, not an option.

~Tim~
Post Tue Oct 19, 2010 5:51 am
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mopowers
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Thanks a lot coaster. I hadn't thought about it like that.
Post Tue Oct 19, 2010 1:29 pm
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moonraker1
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Thanks for sharing the info coaster. i didnt have any clue about points.
Post Tue Oct 19, 2010 6:17 pm
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jenikabourne
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Points come in two varieties: there are discount points you pay to your lender and origination points you pay to the mortgage broker arranging your loan. Regardless of the type of point, one point is always equal to one percent of your mortgage amount,Origination points are used to pay for the costs of obtaining the loan in the first place. They are much less popular than discount points, as they do not provide borrowers with any valuable benefits and are not tax deductible. Borrowers are therefore better off trying to get a loan that does not require them to acquire these kinds of points.
Post Mon Nov 01, 2010 12:13 pm
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zaynahblaze
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One thing is always equal to a percentage of your mortgage amount, origination points in the first place to get credit costs are paid. Discount fewer points than they are popular with borrowers because they do not provide any significant benefit and is not tax deductible. Borrowers are better than a loan because they need to get these types of points is not.
Post Thu Nov 11, 2010 9:36 am
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