One Mortgage point is the equivalent of 1% of your loan. So if you pay two mortgage points at the time you obtain your loan or refinance, you are paying 2% of your loan. Mortgage points are used to allow borrowers to obtain a more favorable loan rate. When you pay points to obtain your Phoenix or Scottsdale mortgage, your lender must provide you with a 1098 tax form at the end of the year. The mortgage points you pay on your purchase loan are deductible during the current tax year providing they meet…

The following guidelines:

• Your Arizona home mortgage is secured by your primary residence where you reside most of the year.

• The business practice of paying mortgage points is customary in your area.

• The points you paid were consistent with the amount charged to other borrowers in the area.

• You report your income in the year you earned or received it, and you deduct your expenses on your income tax return in the year you paid them.

• The points were not for appraisal fees, inspection fees, title fees, attorney fees, or real estate property taxes.

• You must have paid funds out of your own pocket at closing that were equal or more than the points that were charged, and you cannot borrower funds from the lender or your Arizona mortgage broker to pay the points.

• Points on a second home are deduced during the entire loan term.

• The points paid must be reflected on your closing settlement statement.

• The points were computed based upon a percentage of the principal amount of the loan.

Points paid when you refinance are amortized and deductible over the entire loan term. In essence, your Arizona mortgage refinance points are deduced every month during your loan term. If you decide to pay your refinance mortgage off early, then the remaining amount is deducted during the current tax year on your income tax return.

When you are shopping for Arizona mortgage loans, you should work with a trusted and reputable AZ mortgage broker to help you find the best Arizona mortgage rates and loan products. The mortgage broker works with a variety of lenders and can assist you with your application and gathering your financial information to make sure you provide all the necessary documentation required by your lender in order to meet their underwriting guidelines to get your loan approved.

If you have any questions about this or if you have any questions you’d like us to answer on our podcast, you can email your questions to team@azmortgagebrothers.com or give us a call at (602) 535-2171. Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

•••

Thanks for listening and reading the Mortgage Brothers Show. Let us know if you have any questions you’d like us to answer on this podcast. You can email your questions to Tom@AZMortgageBrothers.com or Eddie@AZMortgageBrothers.com.

Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.

BACK TO LIST