"Was this loan paid off or refinanced with a different lender in 2019?"

[pugetsound12]

Trying to figure out correct answer here. We bought a house mid-2019 with a mortgage, then the lender sold it to a different mortgage lender a month later. Should I answer no?

In a subsequent question: "Is this loan a home equity line of credit or a loan you've ever refinanced?"

they give two options: 

1)Yes, this is a loan I've refinanced or a home equity line of credit (HELOC). Learn more
2)No, this is the original loan I used to buy or build my home.

I would answer no (because yes is inaccurate) but this is not the original loan used to buy or build the home (it was sold to a different mortgage company)

[CatinaT1 · Accepted solution]

The answer would be NO, it was not paid off or refinanced.

The second question would also be NO.  It is the original loan.  The fact that the bank sold the loan does not make it a new loan.  The loan remains intact, the servicing of the loan is what is sold, but it's still the same loan.

[eddavis10]

I have a similar situation. I refinanced my home in 2019, and the lender quickly transferred the loan to a different servicer. The issue is I have two 1098 forms, one from the original lender with their name and TIN# (showing some interest paid) , and a different one from the servicer with their name and TIN (which will be ongoing).  If the original loan is intact, (and not checking the box that the "loan was paid off or refinanced with a different lender in 2019") how do I handle entering the new servicing lender's 1098 information? 

[DianeC958]

You enter each 1098 that you received for 2019.  When you get to the question Is this the original loan you took out to purchase the property?  The answer is Yes.  Since the loan was sold it was not refinanced or a HELOC.

[eddavis10]

Hi, thanks for the reply. Actually in this case the loan in question is a refinance, not the original purchase mortgage, so I think the answer to  Is this the original loan you took out to purchase the property? should be no, because, it is not. Please correct me if I am wrong.

So I selected yes to This is a new loan on which I paid points ( origination fees) in 2019,

Yes to I bought or improved my main home with this loan in 2019

I entered the mortgage interest per the 1098 (which only covers part of it. There is more with the servicing lender), and dollar amount of points paid per the HUD statement.

I did not select This loan was paid off or refinanced with a different lender in 2019

Am I correct so far?

Now, how should I enter the second 1098 from the servicing lender to which this refinance loan was sold?

Do I select Add a Lender? Then how do I answer to prompts to indicate this is not really an additional loan on the property but simply a bank to which the loan was sold to perform the servicing?

[DaveF1006]

When you go through the questions regarding your original mortgage, the program asks you "Was this loan paid off or refinanced with a different lender in 2019?" You would say yes to this question and then finish the remainder of the questions in this first 1098. It was technically paid off by the second mortgage servicer to the first servicer for the rights to service your mortgage.

1. Now add the second 1098. go through the questions and when it asks if Is this loan a home equity line of credit or a loan you've ever refinanced? Indicate no that it is the original loan used to buy or build your home.
2. This will show that his is not really an additional loan on the property.  it's a original loan serviced by a different servicer.

[AnthemDBA]

Hi,

I refinanced my loan in 2019.  No matter what I do, I cannot get Turbo Tax to ask me if I paid off the first loan (which was an already refinanced loan).  I have deleted all lenders, re-adding the oldest one first and nothing.  I have gone back deleted everything, saved and closed Turbo Tax, gone back in, re-entered the oldest again, and still nothing.  There are no points involved.

Please tell me what I can do, to get Turbo Tax to prompt me for paying off the loan.

Thank you.