What are refinance points?
by 
The Curious Bag
ANSWERS: 1
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Lenders often charge refinance points as part of the closing costs when you refinance your mortgage.
Purpose
Refinance points are paid to lower the interest rate on your refinanced loan.
Cost
Each point costs 1 percent of the total refinanced. For example, if you refinanced $294,000, each point would cost $2,940.
Effects
Each point you pay will lower the interest rate on your refinance by about .25 percent.
Tax Deductions
You can take a tax deduction for the amount you pay for refinance points over the life of the mortgage. For example, if you paid $1,500 in points over a 10-year loan, you could deduct $150 each year.
Considerations
The Internal Revenue Service categorizes the tax deduction for refinance points as an itemized deduction, meaning you cannot claim them if you take the standard deduction.
Source:
Mortgage Loan: Mortgage Refinance - Tax Deductions and Points
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