My mortgage loan was sold to another lender. When asked about our balance as of the beginning of this year with the first lender, is it technically $0? Seems confusing!

[nisaulog]

We listed both lenders since we received 2 separate 1098 forms. We listed our actual balance for the new lender, but $0 for the first lender since the loan was sold.

[DaveF1006]

Actually you have this reversed. in order to calculate correctly, you should enter the mortgage balance for the first lender and 0 for the second because Box 2 represents the mortgage balance in the beginning of the year.

[nisaulog]

Thanks, Dave! However, we noticed the question is phrased specifically to enter our loan balance as of January 1, 2021 (which is this year). Would that then mean, technically, we don't have a balance owed to the initial lender? 

[DaveF1006]

Actually when you enter your 1098 t for your original loan, and you click on the question mark for Box 2 - Outstanding mortgage principal, it says.

Your outstanding mortgage principal balance is the amount of money you still owe on your home loan. If you took out the loan in 2020, please input your original loan balance. If your loan was funded before 2020, please input your balance as of January 1, 2020.