Loan secured by old home used to buy new home.

Forum|Forum|5 years ago
February 27, 2021
2 replies
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The mortgage on our old home was paid off. We obtained a new mortgage and used our old home to secure the loan. The proceeds were used to pay cash for our new home (principal home) in a different state. When our old home sold some months later, we paid this mortgage off in full. Is the interest we paid on this loan deductible since it was not used on the home used to secure it?

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AmyC

Employee

The interest was used for your main home so it is deductible but you will need to keep track of the paper trail showing it was used on your main home, in the case the IRS asks.

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B

bcameron83

Yes it is absolutely deductible and you will receive a 1098 at the end of the year from the lender. 😁