Question

Home Loan Deductions - New Refi Mortgage with Points Paid Sold to Another Mortgage Co - All in 2020

Forum|Forum|5 years ago
February 1, 2021
1 reply
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We refinanced an existing mortgage on 04/08/2020 and paid points on the refi. That mortgage company sold the mortgage to another mortgage company in September of 2020, and we made our first payment with the new mortgage company on 10/01/2020. How do we enter the mortgage 1098 info for the refinance with points, and then for the mortgage 1098 for the current mortgage company (to whom the mortgage was sold by the refinance mortgage company)?

We have 3 1098s for this home. 1- for the original purchase mortgage that began on 11/14/2014; 2 - for the new refinanced mortgage (this mortgage was sold); and 3 - for the new mortgage company.

The concern I have is that TurboTax Premier wants to amortize the deduction of the points over the life of the loan, but it doesn't transfer the points to the 3rd mortgage company.

M

Mike9241

did you refi for more than the balance on the original mortgage? points on a refi must be amortized but if you refi'd for more than the balance on the original mortgage the amount of points that can be amortized is limited unless you used the extra cash for capital improvements to the home. for practical purposes why not combine amounts, where applicable, from the 1098 for the refi with the 1098 from the purchaser of the refi. use the date of the refi. also, answer questions like the purchase of your mortgage never happened.

T

tmac042016

@Mike9241 Your advice is the same as how Turbro Tax says to handle this. What is not addressed is which lender to use. I have the same issue.

Lender A: original loan on home

Lender B: refinanced original loan and paid points (because points were paid on the refi, they need to be amortized for the life of the loan, but the loan was sold to Lender C)

Lender C: refinanced loan sold to this lender

I can combine the amounts for Lender B and C and enter those into Turbo Tax.

My question which Lender's name do you enter?