Acquiring a mortgage for an investment property will cost you Fannie Mae points. On an 80% loan, it ranges from 1.75-2pts, aproximately $2500 for 2 pts, depending on who you talk to. In addition, you can buy down the rate, .25, for 1 pt.
Is it better to pay the points or have the seller pay the points? The cost of the points will be included in the offer. So, either way I’m paying for them but I was wondering if there are tax benefits for one as compared to the other.
My understanding is that if you pay the points, they are spread out over the life of the loan. It doesn’t look like you can accelerate them in your taxes.
If you include the cost of the points in your mortgage so the seller pays them, you’re still paying over the life of the loan and some interest too, which is deductible but not much.