2025 Homebuyers and Refinancers: Don’t Overlook These Tax Perks👇
Here’s the breakdown:
✅ Discount Points for Your Loan – Deduct points paid to lower your mortgage rate (even if the seller covered them). Remember, these are a percentage of the loan amount—application and processing fees don’t count!
✅ Points from a Refinance – Refinanced in 2025? Points for cash-out improvements are fully deductible. For mixed use, only the portion for home improvements applies this year.
✅ Property Taxes – Deduct actual and pro-rated taxes paid at closing (see Section F of your Closing Disclosure). Escrow amounts are deductible only after your lender pays the municipality.
✅ Prepaid Interest – Daily interest charges you paid at closing? Those can be deducted, too. Look for “prepaid” or “daily interest charges” on your Closing Disclosure.
✅ Unclaimed Points from Old Loans – Refinancing? You might be able to deduct the unused portion of points from your prior loan.
✅ Prepayment Penalties – If you paid a penalty to close out an old loan with a different lender, this could also be deductible.
✅ Closing Costs – Not deductible directly, but they increase your tax basis, which could save you on capital gains taxes when you sell.
These tips apply to primary or vacation homes—not investment properties. Always consult with a CPA to make sure you’re maximizing your savings.
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