What is a Form 1098, Mortgage Interest Statement?

You may have received a Form 1098, Mortgage Interest Statement in preparation for tax season and wondered what exactly the document is, or maybe you are unsure if you need one. Don’t worry! We’re here to break down the basics.

There are other types of 1098 forms you may have heard of before, such as the 1098-T college students receive about tuition fees, but we are focusing specifically on the Form 1098, Mortgage Interest Statement. It’s an Internal Revenue Services (IRS) form reporting the interest, mortgage insurance premiums, and points you paid on a mortgage loan during the year. This form typically will only be issued if you paid $600 or more in interest and the related costs mentioned above. Your lender will send it to you, and if you are a Vanderbilt customer, you can also directly access it for free by signing into your account. You also have the option of requesting a reprint from Vanderbilt for a small fee.

What information is on a Form 1098?

When reviewing your Form 1098, there will be several pieces of information about your mortgage loan. Here are some of the items what you can expect to see:

• The amount of interest you paid to your lender for the tax year
• The outstanding mortgage principle (how much left that you owe on your home)
• The mortgage origination date
• Any refunds issued if you overpaid interest
• The amount of mortgage insurance premiums paid
• Mortgage points paid
• Other details of the mortgage and property, such as your name and address

To see an example of a Form 1098, the IRS has provided a blank copy on its website.

What is a Form 1098 used for?

For lenders, it’s simply reporting to the IRS the amount of interest, mortgage insurance premiums, or points that has been paid on a mortgage loan for the tax year. For a taxpayer, the form can be used for deductions to your taxable income if you qualify. This typically applies if you plan to itemize instead of using the standard deduction when filing.

To be able to claim a mortgage interest tax deduction, there are some rules, such as maximum limits on the amount of the loan and the taxpayer being the primary borrower of the home. Talk to your tax professional for more details and if you meet all the requirements.

And there you have it! To recap, the Form 1098 simply informs you how much mortgage interest, mortgage insurance premiums, or points you have paid, and it will usually be sent to you if the amount paid was $600 or more in case you want to use it as part of your tax deductions. Ready to learn more with us? Check out our Homeowner’s Guide.