Since have a mortgage and you're not itemizing your deductions, just enter your mortgage interest.
You'd use option 1 if you were itemizing and claiming mortgage interest, but has excess mortgage interest, which would be interest you aren't allowed to claim as an itemized deduction.
This would include:
- Mortgages in excess of $750,000 ($375,000 if married filing separately), taken out after December 16, 2017 and used to buy, build, or improve your home
- Mortgages in excess of $1,000,000 ($500,000 if married filing separately), taken out between October 13, 1987 and December 16, 2017 and used for purposes other than to buy, build, or improve your home. For example, you took out a home equity loan and paid off your credit cards and bought a car
