Mortgage rates have dipped to a 14-year low. So if you're planning to refinance, now is a good time.
Here are some tips to help avoid a fight with Uncle Sam.
* If you pay points to refinance, you may deduct them from your federal income tax, but the deduction must be spread over the life of the loan. (A point is an upfront interest charge equal to 1 percent of the loan amount.)
* If the refinancing is in the form of a home-equity loan for home improvements, points are fully deductible in the year they are paid.
* If you refinance for more than your mortgage balance and you use part of the cash for home improvements, the points associated with that part of the loan are fully deductible that year. The rest must be spread over the life of the loan.
* Always pay points with a separate check to keep tax records straight.
* Charges for services rendered by the lender are not deductible, even if the lender calls them points.
When buying a mutual fund, look out for annual fees. Over the last three years, funds with the lowest fees had an average return of 39 percent. Those with the highest fees averaged only 27 percent.
Financial goals are crucial to financial success. But what will it take to reach your goals? There is a new booklet called "Guide to Attaining Your Investment Goals." To get a free copy, write to: American Capital Management & Research, P.O. Box 1411, Houston, Texas 77251-1411.