mh0520
Returning Member

Mortgage Interest Deduction after Refinance

In 2019, I purchased a new home and subsequently in 2020, I refinance the mortgage on this home to reduce the interest rate. Both mortgages were held by the same lender but I received two separate 1098s.

 

I am having an issue after entering the two 1098s where it is telling me that the interested deduction needs to be limited. I have tried importing the first 1098 and making any necessary corrections to the original loans 1098. During this import, I indicated that the mortgage was paid of or refinance with a different lender (I assumed that in my case it was paid off and so I should say yes here). Additionally, I select that the loan was refinanced and no cash was taken from the loan in the refinance.

 

I'm not clear on how I should answer some of these questions. Here's what I entered for the questions regarding the refinance:

 

  • Original Loan
    • Was this loan paid off or refinanced with a different lender? 
      • Yes
    • Is this loan a home equity line of credit or a loan you've ever refinanced?
      • Yes, this is a loan I've refinanced or a home equity line of credit (HELOC).
      • A mortgage loan that I've refinanced
      • No, I have never pulled cash from this loan when refinancing it.
  • New Loan
    • Was this loan paid off or refinanced with a different lender in 2020?
      • No
    • Is this loan a home equity line of credit or a loan you've ever refinanced?
      • I'm not sure how to answer this one because it's not the original loan but I have not refinanced it.

 

So, my question is two part.

 

  1. Does what I have entered so far make sense for a refinanced mortgage?
  2. If no, what'd I do wrong? If yes, what do I answer for the new loan as to whether it is an HELOC or if I have ever refinance. I haven't refinanced it but it's also not the original loan that I took out to buy the home.

 

I think I've missed something here but I can't figure out the right combination for my scenario.