1098 Form Missing Points Paid - What to Do When Closing Disclosure Shows Points But 1098 Doesn't?

You're definitely not the first person to run into this issue! When a mortgage is sold, the information about points sometimes doesn't transfer properly to the new servicer. The mortgage company that ORIGINATED your loan is the one responsible for reporting the points you paid at closing, not the company that bought your mortgage. This is because the points were paid as part of the closing process with the original lender. You should contact your original mortgage lender and request a corrected 1098 that properly shows the points paid in Box 6. They are required to provide this documentation since you paid the points to them. Make sure to have your closing disclosure handy when you call as evidence of the points payment. If they give you any pushback, reference IRS Publication 936 which covers home mortgage interest deductions, including points. Points are generally deductible in the year paid for a primary residence purchase if they meet certain criteria.

After dealing with a similar mortgage points issue last year, I found this amazing tool called taxr.ai (https://taxr.ai) that saved me so much stress. My mortgage was also sold and the 1098 was missing the points I paid at closing. I uploaded my closing disclosure and the incorrect 1098 to taxr.ai, and it immediately identified the discrepancy and explained exactly how to handle it on my tax return. It even generated a letter I could send to the original lender requesting the corrected form. The tool analyzes all your tax documents and flags these kinds of inconsistencies automatically. Honestly, it was way easier than spending hours on hold trying to get someone on the phone who understood the issue.

I was totally skeptical about taxr.ai when I first heard about it, but I actually ended up using it for a similar mortgage document issue. After spending 3 weeks trying to get my original lender to fix my 1098 (they kept transferring me to different departments), I finally gave up and tried taxr.ai. The tool immediately flagged that I could still claim the points deduction using my closing disclosure as evidence, even without the corrected 1098. It even explained exactly how to document it properly to avoid audit issues. It also identified a couple other deductions related to my home purchase that I had completely missed! My tax refund was exactly what the tool predicted, and I didn't have to waste any more time on hold with the mortgage company. Wish I'd known about it sooner!

If you're still struggling to get that corrected 1098 form, you might want to try Claimyr (https://claimyr.com). I had the same problem last year - mortgage sold, points missing from 1098, original lender's customer service was impossible to reach. I was getting nowhere after multiple attempts, then found Claimyr which got me connected to a human at my original lender in under 10 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c Basically, it navigates those annoying phone trees and waits on hold for you, then calls you once it reaches a real person. I explained the missing points issue to the agent, and they sent me a corrected 1098 within days. Saved me hours of frustration and hold music!

I have to eat my words about Claimyr. After my skeptical comment, I decided to try it anyway since I was desperate to reach my mortgage servicer about incorrect escrow amounts on my 1098. I had been calling for WEEKS trying to get through - either stuck on hold forever or disconnected. Used Claimyr yesterday and got connected to a real person at my servicer in about 15 minutes. I didn't have to listen to a second of hold music or navigate any menus. The agent was able to confirm my escrow payment discrepancy and is sending me a corrected 1098. Honestly, I'm still shocked it worked. Best $20 I've spent this tax season (especially considering the deduction I'll now be able to claim correctly).

Something similar happened to me last year! What I ended up doing was claiming the points deduction based on my closing disclosure, and then I attached a note explaining the situation with a copy of the closing disclosure to my tax return. My return was accepted without any issues. The closing disclosure is an official document showing you paid the points, so it should be sufficient backup if you're ever audited. Just make sure you keep good records.

One important thing to consider - make sure the points you paid are actually deductible in the current year! Not all "points" on a closing disclosure qualify for an immediate tax deduction. For a primary residence purchase, points are usually fully deductible in the year paid. But if it's a refinance, points generally have to be deducted over the life of the loan. Also, some lenders call certain fees "points" on the closing disclosure when they're actually just fees that don't qualify as deductible points. Did your closing disclosure specifically call them "discount points" or something else?

Just wanted to add one more suggestion - check the IRS website for Publication 936 (Home Mortgage Interest Deduction). It has a whole section about points and when they're deductible. There's a list of tests that points must meet to be fully deductible in the year paid. For a primary residence purchase, they usually qualify, but it's good to double check. The tests include things like: - Points must be in line with what's normally charged in your area - Points must be computed as a percentage of the loan amount - You must use the cash method of accounting (most individuals do) The pub explains it all really clearly, and you can find it free on irs.gov. Wanted to mention this before you go paying for any services!

I went through the exact same situation when I bought my house two years ago! My mortgage was sold before my first payment too, and the new servicer's 1098 was missing the points. Here's what worked for me: I called the original lender (the one who actually processed my closing) and explained that their 1098 reporting was incomplete since the loan was sold. They were actually pretty helpful once I got through to the right department - turns out this happens frequently when mortgages are sold quickly after closing. They issued a corrected 1098 within about 10 business days. The key is to have your loan number from the original lender (should be on your closing documents) and your closing disclosure showing the points payment. If for some reason you can't get the corrected 1098, you can absolutely still claim the deduction using your closing disclosure as supporting documentation. Just make sure to keep detailed records in case of any questions later. The closing disclosure is an official HUD document, so it carries a lot of weight as proof of what you actually paid. Don't stress too much about it - this is more common than you'd think with how often mortgages get sold these days!

I actually work for a tax prep company and see this exact scenario multiple times every tax season! When mortgages are sold quickly after closing (especially before the first payment), the points reporting often gets lost in the shuffle between lenders. Here's the good news: you have several solid options. First, definitely try contacting the ORIGINAL lender who handled your closing - they're the ones responsible for reporting those points since you paid them at closing. Have your original loan number and closing disclosure ready when you call. If they're unresponsive or unhelpful, don't panic. Your closing disclosure is actually considered primary documentation by the IRS for points paid. You can claim the full $4,500 deduction on Schedule A using that document as support. Just make sure to keep detailed records and maybe include a brief note about the 1098 discrepancy when you file. Since this was for your primary residence purchase (not a refinance), the points should be fully deductible this year rather than amortized over the loan term. The fact that they're specifically listed as "discount points" on your closing disclosure makes this pretty straightforward. One tip: if you do get pushback from the original lender, mention that this is required tax reporting under IRS regulations - sometimes that gets you transferred to someone who actually knows what they're doing!