For general info on mortgage interest see https://www.irs.gov/pub/irs-pdf/p936.pdf
Note that after tax reform mortgage interest deductions don't matter for many people because the total of mortgage interest, charitable contributions, state and local taxes (max $10k) must all add up to more than the now large standard deduction before you see any benefit. The standard deduction is $12k single and $24k married for 2018.
Note that the home must collateral for repayment of the loan (i.e. the loan must be secured by a lien on the home).
You would not give a 1099 to your grandmother. If your grandmother were in the business of lending money she would have to give you a 1098, but otherwise no.
This previous answer tells you how to enter the interest (if qualified) into TT:
https://ttlc.intuit.com/questions/4059646-mortgage-interest-deduction-when-seller-financed
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