Hi, I'm doing my 2011 taxes (which I swore I'd do earlier this year ), and a question has come up about whether or not I should have fully/partially/or amortized points paid on a 2009 refinance. If fully, it's worth amending my 2009 return; if amortized, not sure if I want to go back and amend my 2009 and 2010...because that would include my CA state returns, too.
The details are:
I refinanced my home in 2009 to pay some large medical bills, among other things. It closed March 16, 2009. I got $63,977.22 cash out. Using round figures, the original loan balance was around $331,000, and the new loan was for $460,000. Both original and new loans were/are held with my credit union, and for 20 years. The new loan documents from my lender state verbatim:
Itemization of Amount Financed of $451,496.78:
$460,000.00 Amount given to me directly $460,000.00 Principal amount of loan $8,503.33 Prepaid finance charge (itemization below):
$6,900.00 for "points" paid by me $1,022.22 for 16 days prepaid interest $88.00 Tax related service fee $300.00 Loan processing fee $150.00 Underwriting fee $18.00 Flood certification fee $$25.00 Other fee
I also received a check for $63,977.22 as cash out.
There are other non-relevant sections.
I get a Form 1098 every year from my lender. Box 1 shows the interest paid on the loan. Box 2, which is for points paid, has been empty all years. My questions are:
1) are the $6,900.00 points paid decuctible in any manner, or is the interest on this included in Box 1, loan interest?2) if deductible, are they all deductible in the year paid, 2009, or only amortizable?
Normally, I'd think that the interest for the points is paid with the monthly loan payments, but because I got cash-out, I wonder if it was 'taken' from the $63,977.22; I told my lender I wanted to refi for $460,000.
3) I am thinking about refinancing again, for a 15 year loan. If I do, and if I go back to 2009 and amend to fully deduct the $6,900.00, will I end up paying some of that deduction back?Thanks in advance, to anyone that is reading this.