Loan Discount Points you paid on a refinance are generally not deductible in the year you pay them.  Discount points are any points you paid to ‘buy down’ your interest rate.  The longer you are likely to stay in your home, the more it makes sense to pay upfront points for your lower rate. 
(Calculate how many months it will take to make up for paid points)

If these items are paid on a refinance, they usually must be amortized over the period of the loan.  If you sold or refinanced again in 2008, you can deduct whatever amount remained from your earlier refinance if you refinanced with a different lender.   If you refinanced with the same lender, the points must continue to be deducted over the life of the loan.

However, if part or all of the funds are used to improve your main home, the portion attributable to that use is deductible provided that all the other requirements for deducting points is met. 

Points on a second home must be deducted rateably over the life of the loan.