Can I itemize my mortgage interest paid in my taxes?

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In order for me to qualify for this I need to meet this requirement::

“The mortgage or home equity loan must be secured by your home. This means that you specified your home as collateral for the loan.”

I wasn’t aware that there was anything else I could “specify” as collateral for my loan. If I don’t pay my mortgage, the bank gets the house. It’s that simple.
So, can I go ahead and take this deduction?

5 Comments
  1. Reply
    ucla987
    April 30, 2011 at 12:34 am

    The word “specified” is demonstrated through the “security instrument.” Look through both your promissory note and your deed of trust: both will name your home as collateral. If you read further, another requirement, as it applies to cash out or home equity lines, that it must have been applied toward either the purchase of the subject property or improvement. Technically, that’s what the IRS uses, but practically speaking, they don’t check. So, yep, write it off.

  2. Reply
    RED
    April 30, 2011 at 1:06 am

    Yes, you can take the deduction. You should provide a statement that your lender should have sent you by Jan 31 showing the amount of interest paid. If they haven’t sent it to you ask them for it. (I forget what it’s specifically called). If you itemize make sure the itemized amount of deductions is more than the standard deduction you may be eligible for. (for example $ 10,000 married deduction).

  3. Reply
    bostonianinmo
    April 30, 2011 at 1:21 am

    That means that your home is specified as collateral for the loan, plain and simple. So yes, you can deduct your mortgage interest.

  4. Reply
    Mark C
    April 30, 2011 at 1:31 am

    A secured debt is one in which you sign an instrument (such as a mortgage, deed of trust, or land contract) that: 1) Makes your ownership in a qualified home security for payment of the debt, 2) Provides, in case of default, that your home could satisfy the debt, and 3) Is recorded or is otherwise perfected under any state or local law that applies. In other words, your home is a secured debt if you put your home up as collateral to protect the interest of the lender.

    A debt is not secured by your home if it is secured solely because of a lien on your general assets or if it is a security interest that attaches to the property without your consent (such as a mechanic’s lien or judgment lien).

    Generally, mortgages are secured debt with your home as collateral unless it is secured by a lein on your general assets. So, yeah deduct it if this is the case. Just to echo what one respondee stated, check mortgage or your deed of trust to be sure.

    The form you should have received for your the mortgage intererst you paid for your home is a 2006 Mortgage Interest Statement- Form 1098. I am sure you have received this from your lender or lenders. It sounds like you are a first time homebuyer. So don’t forget you can also deduct points paid to obtain a home morgtage (check your settlement statement for loan origination fees, maximum loan charges loan discount, or discount points which are all points paid) and real estate taxes paid if you are itemizing.

  5. Reply
    STEVEN F
    April 30, 2011 at 2:17 am

    There isn’t anything else you can specify as collateral for you mortgage. Your just over analyzing the legal term. If they can take your house if you default, the house is ‘specified’ as collateral for the loan. Unless we seriously misunderstand your question, you can claim the interest as an itemized deduction. If you received a 1098 for the loan, it is a mortgage.

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