You can use this method if at all times in 2022 the mortgage was secured by your qualified home and the interest was paid at least monthly. On March 2, 2022, when the home had a fair market value of $1,700,000 and she owed $500,000 on the mortgage, Sharon took out a second mortgage for $200,000. Mr. Blue had a mortgage secured by his main home all year. Add the results together and enter the total on line 2. Include the average balance for the current year for any home acquisition debt part of a mixed-use mortgage. In 1986, Sharon took out a first mortgage of $1,400,000. To complete Table 1, line 7, Sharon must figure a separate average balance for the part of her second mortgage that is home acquisition debt. Under the loan agreement, Sharon must make principal payments of $1,000 at the end of each month. The March through December balances were all $180,000 because none of her principal payments are applied to the home acquisition debt. The facts are the same as in Example 1. In 2023, Sharon's January through October principal payments on her second mortgage are applied to the home equity debt, reducing it to zero.
You treat your payments as level even if they were adjusted from time to time because of changes in the interest rate. Across the board, it had led to significant changes in ways of working. This form will show the amount of interest to enter on line 13. Also, include on this line any other interest payments made on debts secured by a qualified home for which you didn't receive a Form 1098. Don't include points or mortgage insurance premiums on this line. For example, a mortgage you took out during the year is a mixed-use mortgage if you used its proceeds partly to refinance a mortgage that you took out in an earlier year to buy your home (home acquisition debt) and partly to buy a car (home equity debt). Add the average balances together and enter the total on line 12. See Average Mortgage Balance, earlier. Complete the following worksheet to figure your average balance.
Note. If the average balance consists of more than one category of debt (grandfathered debt, home acquisition debt, and home equity debt), see Mixed-use mortgages, earlier, secure warehouse storage to figure the average mortgage balance. A mixed-use mortgage is a loan that consists of more than one of the three categories of debt (grandfathered debt, home acquisition debt, and home equity debt). 3. Finally, any home acquisition debt. Figure the average balance for the current year of each mortgage you took out on all qualified homes after December 15, 2017, to buy, build, or substantially improve the home (home acquisition debt). Figure the average balance for the current year of each outstanding home mortgage. Add the results together and enter the total on line 1. Include the average balance for the current year for any grandfathered debt part of a mixed-use mortgage. If you receive monthly statements showing the closing balance or the average balance for the month, you can use either to figure your average balance for the year. Statements provided by your lender. She received monthly statements showing her average balance for each month. 1. Figure the balance of that category of debt for each month. Don’t use the methods described earlier in this section to figure the average balance of either category.
This is the amount of the loan proceeds allocated to that category, reduced by your principal payments on the mortgage previously applied to that category. If you make payments to a financial institution, or to a person whose business is making loans, you should get Form 1098 or a similar statement from the lender. If your lender can give you your average balance for the year, you can use that amount. Figure the average balance for the current year of each mortgage you had on all qualified homes on October 13, 1987 (grandfathered debt). For each mortgage, figure your average balance by adding your monthly closing or average balances and dividing that total by the number of months the home secured by that mortgage was a qualified home during the year. The balance of the home acquisition debt remains $180,000 for each of those months. Figure the average balance for the current year of each mortgage you took out on all qualified homes after October 13, 1987, and prior to December 16, 2017, to buy, build, or substantially improve the home (home acquisition debt).