Box 2 of the 2020 Form 1098 should reflect the balance of the loan as of 01/01/2020, not 2021. You must be looking at the 2021 Form 1098 Instructions instead of 2020.
The document should be completed by the mortgage company and you need to input the document as it was prepared for you by the mortgage company.
If the loan was refinanced during the year, then there would have been a balance on it as of 01/01/2020 which should be reported in box 2 of the Form 1098.
The instructions for box 2 of the 2020 Form 1098 are as follows:
Box 2. Shows the outstanding principal on the mortgage as of January 1, 2020. If the mortgage originated in 2020, shows the mortgage principal as of the date of origination. If the recipient/lender acquired the loan in 2020, shows the mortgage principal as of the date of acquisition.
If you are using the 2020 Form 1098,.enter what is on the form.
The loan balance as of January 1, 2021 would be considered as the end of the year for 2020. This is the amount starting off 2021.
Now if this is a refinanced loan and was paid off sometime during 2020, then this amount is $0.