Home ownership carries the tremendous benefit of enabling the owner to deduct the interest paid the previous year on a mortgage loan. Along with this benefit, as a homeowner, you may also deduct points for refinancing or purchasing a new home. Don't overlook this deduction, it's an opportunity to save on your taxes.

One point equals 1% of the loan amount, paid at the time of closing. In exchange for paying this fee up front you get a lower interest rate. This is often referred to as "buying down your rate." At tax time each year, your lender is required to issue you a Form 1098 indicating both the interest you've paid, as well as the points that were paid at closing. Take a close look at your 1098 statements. If you paid points last year they should be itemized on this document.

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