Are closing costs tax deductable on federal taxes?
There are rules and guidelines to these deductions, however. Even though Realtors and lenders have the best intentions, sometimes they are a little “fuzzy” about exactly what is deductible. What are Points? When most people buy a home, they generally obtain a mortgage. Mortgages have costs and one of those costs is the “loan origination fee.” The loan origination fee is usually a percentage of the loan amount, generally expressed as “points.” For example, one “point” on a $150,000 loan would be $1500. One and a half points on the same loan amount would be $2250. On VA and FHA loans, points are often broken down into two categories: loan origination fee (which is usually one point) and discount points (which are also a percentage of the loan balance). Both are deductible. The loan origination fee must be expressed as points in order for it to be tax deductible. Deducting Points when Buying a Home When buying a home, points are deductible in the year they are paid, providing they meet ce
