Form 1098 Year End Statement - Points

Mortgage points are funds paid at the time of origination of the loan to reduce the interest rate.  Each point bought cost 1% of the mortgage amount.  

Example:  One point on a $200,000.00 mortgage would cost $2,000.00  

Mortgage lenders report points on the year end statement when:

  • Points paid associated with a mortgage purchase (not a refinance) that is the primary residence
  • Other IRS guidelines and regulations may permit points to be claimed - customers must consult with a tax preparer

Scenarios where points are not permitted to be reported are also outlined in IRS guidelines and regulations. 

  • Refinanced loans 
  • Loan obtained to purchase or improve a residence that is not the principal residence (second home, investment or vacation home)
  • Home Equity Line of Credit
  • Loan obtained to improve a principal residence

Customers may have questions about points listed on their 1098 statement, and customers may have questions why no amount for points are listed on their 1098 statement.  Advise the following:

  • Points are reported on the 1098 statements in accordance with IRS guidelines
  • Fairway is unable to add dollar amounts for points to the 1098 statements that are not permitted within IRS guidelines
  • We are unable to change the dollar amount for points printed on the 1098 statements. 

Specific to dollar amounts referenced on the Closing Disclosure regarding points paid, customers should contact a tax preparer for guidance.  

Customers should contact a tax preparer or visit the IRS.gov website for further assistance with points and how they may be claimed when filing their federal tax return.  

Remember, we are unable to give tax advice or interpret IRS guidelines and regulations.