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From: king@kestrel.ARPA (Dick King)
Newsgroups: net.invest
Subject: Re: The 3% rule
Message-ID: <4865@kestrel.ARPA>
Date: Mon, 17-Feb-86 13:34:35 EST
Article-I.D.: kestrel.4865
Posted: Mon Feb 17 13:34:35 1986
Date-Received: Thu, 20-Feb-86 00:00:57 EST
Organization: Kestrel Institute, Palo Alto, CA
Lines: 25


   From: lab@rochester.UUCP (Lab Manager)
   Newsgroups: net.invest
   Date: 13 Feb 86 16:49:13 GMT
   Reply-To: lab@seneca.UUCP (Lab Manager(Brad Miller))

   In article <1067@ihuxk.UUCP> rs55611@ihuxk.UUCP (Robert E. Schleicher) writes:
   >> >It seems to me that, as long as I keep the mortgage at least 2 1/2 years,
   >> >this is a good deal.  Am I missing something?  Maybe we should rename

   >The tax effects are more subtle than alluded to above.  The refinancing 
   >points are deductible in the present year ($3000 in example above),

   >Bob Schleicher
   >ihuxk!rs55611
   >
   I don't beleive this is correct. I think points are deductible only if
   they are used to purchase something 'new' - i.e. not for refinancing.
   Best check your tax code and be sure before you refinance (otherwise,
   the points are deducted over the lifetime of the loan).

If the points are deductible over the life of the loan, can you take
all of the deduction you have not yet taken if you pay off the loan
early?  Is the deduction proportional to interest paid (which is
greater in earlier parts of the loan) or in equal annual installments?