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Mortgage refinancing and taxes question

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What is the name of your state? Michigan

I hope I can ask this here, if not please direct me to the proper place!

I refinanced my mortgage last year and when I closed, the guy told me that all my fees are deductible. So, I signed away!

Now I have a total of $6807.29 in fees that I don't know how to claim on my income tax returns. Help please!!!
 


tranquility

Senior Member
It's almost like the guy was trying to sell you a loan rather than give you tax advice.

Points are deductible on a refinance (Where the money is not used to buy, build or make substantial improvements to the house.) over the life of the loan. Amount of points divided by the life of the loan and deducted on Schedule A. That's assuming it was a personal residence where the debtor paid the points.

"Fees" are not deductible. Generally, fees are appraisal fees, notary fees, preparation costs, mortgage insurance premiums and other thing paid for specific services connected with the loan.

"Points" need to be clearly listed on the settlement statement. Be computed as a percentage of the loan. For an amount and purpose of the general business practice in that area. Are paid directly by the taxpayer.

General bottom line (But could change depending on the acutal facts.), if the amounts you paid were a percentage of the loan they are probably going to be deductible over the life of the loan. If not, they are not deductible. If you have points still being deducted from a previous loan, those are all deductible in the year of refinancing as long as you used a different bank.
 
Okay, that's helpful...thanks. Maybe you can help clarify something though?

There are multiple fees and charges on my statement. Loan origination fee, appraisal fee, tax service fee, underwriting fee, flood certification fee, processing fee, administration fee, application fee, closing fee, notary fee, title insurance, wire fee, recording fee.

From what I understand the "loan origination fee" is considered points. And as far as I know, and as I can tell from my paperwork, this is not spread out along the loan, it's all added onto it.

The other problem, according to my 1098, there are no points listed. Only "mortgage interest received from payer(s)/borrowers(s)". Does this mean I got lied to and basically screwed??? I wouldn't have signed the papers with this $7000 in fees if I knew I couldn't at least write some of them off! The guy said I can claim it all!

:(
 

LdiJ

Senior Member
Okay, that's helpful...thanks. Maybe you can help clarify something though?

There are multiple fees and charges on my statement. Loan origination fee, appraisal fee, tax service fee, underwriting fee, flood certification fee, processing fee, administration fee, application fee, closing fee, notary fee, title insurance, wire fee, recording fee.

From what I understand the "loan origination fee" is considered points. And as far as I know, and as I can tell from my paperwork, this is not spread out along the loan, it's all added onto it.

The other problem, according to my 1098, there are no points listed. Only "mortgage interest received from payer(s)/borrowers(s)". Does this mean I got lied to and basically screwed??? I wouldn't have signed the papers with this $7000 in fees if I knew I couldn't at least write some of them off! The guy said I can claim it all!

:(
Yes, you basically got conned. I am sorry.
 

abezon

Senior Member
You might report the refinance company to the state attorney general or the county prosecutor's fraud division. If the representantive lied about the loan terms or warranted a certain deductibility, you might have a claim for loan fraud or breach of warranty.
 

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