Gerald’s Article Insights: Unrecorded Mortgage From ‘Bank of Mom’ Fails to Qualify for Interest Deduction
Your mortgage must be secured and recorded to be tax deductible. If you borrow from a big financial institution to buy a home like most of us do, you shouldn’t have to worry about your lender making sure their collateral is safe and your interest payments are deductible. Your lender should send you a statement every year indicating the amount of mortgage interest you paid—it’s a good idea to check that statement to make sure it matches the scheduled interest to be paid for that year on your mortgage loan’s amortization schedule. There are some politicians who have recently suggested we reconsider the powerful mortgage interest deduction that property owners benefit from. Eliminating or restricting the mortgage interest deduction would have an immediate and negative effect on real estate prices which I think is one of many reasons it is safe for now.