Refinancing Your Home – Are the Costs Tax Deductible?

When you refinance your home you may be eligible to deduct some of the costs associated with your loans. 
One of these costs are “points”.  “Points” is used to describe some of the charges you incur to obtain your mortgage.  Taxpayers who itemize may be able to deduct the points paid as mortgage interest.  However, when points paid are only for a refinance then they must be deducted over the life of the loan.  There is an exception to this rule.  If the refinanced mortgage money was used to finance improvements to the home, then they may be fully deductible in the year the points were paid. 

The other closing costs paid when refinancing (i.e. appraisal fees, etc) are not deductible. 

If you are refinancing your home and need help with what is deductible then please contact us for additional help.  www.huddlestontax.com

 

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