Why is my mortgage interest dropped to practically nothing?

[Frisky070802]

I have a refinance in the area of $400K --- my mortgage has never exceeded the point at which interest is disallowed.  I paid almost $10K in mortgage interest, but I saw that some worksheet was showing the allowable interest as only something like $11.  I found something dating back TWO YEARS saying there was a bug where somehow the current balance and the original amount were being added together, resulting in the software thinking the total was too high, and the user should manually edit to remove one.  I had to actively change that and to override the box talking about how the refi had been used ... and then the computation turned to $20.  I overrode it to put in the full amount of mortgage interest, but I clearly shouldn't have to.  What's going on?  

[zomboo]

I am not clear on your situation from the information you provided. A reduction of $10K to $11 is crazy. Sounds like you blew up something in the software. Did you refinance this year and have 1098's from both the original and refinance company? If so, make sure to enter the original 1098 first and indicate that it is a refinanced loan if asked and respond with 'No' when asked if this is the most recent 1098. For the 1098 on the refinance, indicate that it is a refinance of a previous loan and respond 'Yes' when asked if it is the most recent 1098.

[Frisky070802]

I did not refinance recently.  I had only one 1098 and that is what I said.  but when I went to the worksheet, it seemed to have two numbers, the one I entered as the current balance and a higher number, the origin of which I am not sure of.  I found a different article that said that 2 years ago (!!) there was a bug where it would take the original and the refinanced amount and sum them together and then declare you get little or no benefit.  I cleared the other number out, but the amount shown as the interest deduction only went up a tiny amount.  I finally overrode the actual entry, but I'm wondering why this should be necessary.  

[zomboo]

I believe the problem that existed two years ago has been corrected. You should not have to go into the worksheet and override it. When you say you see two numbers, what are they listed under? Are you seeing two loans when you only have one?

[Frisky070802]

Well, this is weird.  I went back to try and recover the original bogus numbers so I could say exactly what was where.  I deleted the worksheet and started over with the info from my 1098.  And this time ... it seems the numbers came out as I expected.  I didn't enter anything differently AFAIK.  

So, I appreciate the people who responded and tried to probe to see what went wrong.  I wish I could explain.  (Note, I'm not a financial sort, but I'm a PhD computer scientist -- I think I can enter numbers into a form, most of the time!!) 

[zomboo]

I also majored in computer science, although not a PhD.

[Frisky070802]

Heh. I’m just trying to say I’m not a total idiot! 🙂