| Title: | Market Investing |
| Moderator: | 2155::michaud |
| Created: | Thu Jan 23 1992 |
| Last Modified: | Thu Jun 05 1997 |
| Last Successful Update: | Fri Jun 06 1997 |
| Number of topics: | 1060 |
| Total number of notes: | 10477 |
I'm in the process of having a house built and am shopping around for
construction loans. For all construction loans, points are paid
(typically 2 points) as well as interest (paid monthly). I would
assume all points (if paid by separate check at closing) are tax
deductible, is the interest also tax deductible? (i.e., does the IRS
consider this interest as interest on my primary or secondary
mortgage?).
-- Phil
| T.R | Title | User | Personal Name | Date | Lines |
|---|---|---|---|---|---|
| 130.1 | Short answer: yes | GOLF::BROUILLET | Mon Mar 30 1992 11:53 | 11 | |
As long as the construction loan is taken out to build your main home,
and the total of the mortgage(s) is less than $1,000,000 (we'll assume
that it is :^), then yes, the interest and points are deductible in the
current tax year.
If you have to pay any additional points to turn your construction loan
into a permanent mortgage, then that would probably be considered
refinancing, and those additional points would have to be spread out
over the term of the loan.
/Don
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| 130.2 | Great! I can use the subsidy | DATABS::ROYAL | Mon Mar 30 1992 16:24 | 10 | |
Great, this makes sense to me. Concord Cooperative Bank has the best
program around. It involves only 1 closing. Costs 2 points (plus all
normal closing costs) and the interest rate is prime + 2 pts = 8.5%. A
conversion fee of $300.00 is charged when I get the occupancy permit.
The loan converts into a 30 yr fixed rate at 8 7/8 (if I closed Friday,
it's essentially the same rate as their 2pt 30 yr fixed rate program
(which was 9% Friday)).
-- Phil
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