Jul
6
Must Win asked:
I just refinanced. No Points, no PMI, just some typical fees, prepaid interest. But as a part of this refi, I had to pay down some of my prior loan balance down to the appropriate level so that my new mortgage didn’t exceed 80% of the assessed value. At closing, this amount was part of my closing costs, went to the title agent, who pays off my previous bank. My question – the title agent at closing said that the entire amount say $20K that I paid down my previous mortage by via closing is tax deductible as a cost of my new mortgage. And if I had paid the previous bank down directly prior to closing, it wouldn’t have been deductible. Is this deductible? I can’t see how it is. But she proceeded to swear it was, citing her H&R Block day job to bolster her credibility. Let me know what you think. Thanks. Brian
Cathy
I just refinanced. No Points, no PMI, just some typical fees, prepaid interest. But as a part of this refi, I had to pay down some of my prior loan balance down to the appropriate level so that my new mortgage didn’t exceed 80% of the assessed value. At closing, this amount was part of my closing costs, went to the title agent, who pays off my previous bank. My question – the title agent at closing said that the entire amount say $20K that I paid down my previous mortage by via closing is tax deductible as a cost of my new mortgage. And if I had paid the previous bank down directly prior to closing, it wouldn’t have been deductible. Is this deductible? I can’t see how it is. But she proceeded to swear it was, citing her H&R Block day job to bolster her credibility. Let me know what you think. Thanks. Brian
Cathy
Comments
3 Responses to “Refinanced Mortgage and paid down some prior loan – what’s deductible?”
Leave a Reply
Danny
You are right, she is an idiot.
Eileen
If you are paying down the mortgage it is not deductible. The mortgage interest would be. Most closing costs add to the basis of your home. I do not trust what realtors say.
Clyde
Bottom Line— Interest payments and POINTS paid are deductable.