Home mortgage points are certain charges you pay to obtain a
home mortgage. Points are usually charged based on a percentage of
the loan amount. In some cases home mortgage points are deductible
in the year you paid them, as an itemized deduction.
All of the following conditions must be met for your home
mortgage points to be fully deductible in the year you paid
If you cannot meet all of the guidelines for points to be
deductible in full, you may be able to deduct the points over the
lifetime of your mortgage. Second home mortgage points are
deductible over the lifetime of the loan, instead of only the year
they were paid.
Points paid to refinance an existing mortgage are usually
deducted over the life of refinance loan. However, if part of the
refinanced mortgage is used to make improvements to your main home,
and you meet the first six requirements in the deduction
guidelines, you can fully deduct the part of the points related to
the improvements in the year you paid the points.
For more information see IRS
Tax Topic 504 - Home Mortgage Points and Publication 936.