If you have recently purchased a home, don't overlook the tax break available for the points paid to get a home loan. Each "point" is one percent of the loan amount. Lenders charge points a means of generating a profit, and borrowers generally pay points in exchange for lower mortgage rates. On a conventional mortgage(usually a fixed rate, 30 year loan that is not insured by a federal agency, points may be paid by the buyer, the seller or split between them. Even if the seller pays the points, the buyer gets the deduction. Loan points are fully deductible in the year paid if the meet a set of requirements, which apply to loan costs associated with a primary residence.
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