Points on Mortgage Financing

[Earl]

Client purchased home last year. Settlement sheet shows Loan Origination and Loan Discount in the amount of $3,013 in borrowers column. Nothing in Sellers column for this item.

Cash at settlement shows $1,617 from borrower, no deposit of earnest paid up front. Points can be deducted in full if borrower pays lender at least as much as the points charged. Since borrower did not pay that much must he amortize the full amount of points or can he deduct up to the amount he paid and amortize the remainder.

Total closing costs (including the points) were $5,648. If seller paid $3,500 of the closing costs would this make a difference in the amount of points able to be deducted.

[JG EA]

I would take the points up to the amount "paid" at closing and amortize the rest.

[Earl]

Points

You do not feel that the money the seller paid ($3,500) could not be considered as seller paid points since it was paid by seller at closing even though not listed as seller paid points on settlement sheet.

[Gretel]

Does the settlement statement state something for closing costs paid by seller for buyer? If so, I believe this counts as paid by buyer. If SS states that points were paid by seller for buyer than I am sure you can take this amount for the buyer as well.

[jimenright]

I agree with Gretel -- see chart in pub 17 pg 154

[JG EA]

You do not feel that the money the seller paid ($3,500) could not be considered as seller paid points since it was paid by seller at closing even though not listed as seller paid points on settlement sheet.

Sorry. Yes I do! By paid I meant all the stuff paid.That's why it was in quotes. (I am writing on my blackboard: I will be more clear, I will be more clear.)