It can also be any similar property that has facilities for sleeping, cooking, and toilet functions. Properties that don’t qualify as your main home are those that lack basic living accommodations.
2. Interest on the mortgage for a second home
You can use the mortgage interest deduction on a mortgage for a property that is not your primary residence. The condition is that your second home must be listed as collateral for the mortgage.
If you rent out your second home, you must use it for more than 14 days or more than 10% of the total days you rent it out—whichever is longer. You can only deduct the interest from one home if you have more than one second home.
3. Mortgage points you have paid
You might have the option to pay mortgage points when you take out a mortgage. This means that you can pay a portion of your home loan interest in advance. Mortgage points usually cost roughly 1% of your mortgage amount and can earn you around 25% off your mortgage rate.
To qualify for the deduction, mortgage points must be paid at closing and directly to the bank or mortgage lender. In some cases, mortgage points can be deducted during the same year that they’re paid.
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