Anyone here have any experience with US tax code and mortgage interest deductions? I'm trying to structure a family loan and need some advice. More specifically, I have a 30-year mortgage of $119,200 that I am getting through a family member rather than a bank, as they were able to offer a lower rate. The rate will have to be at the June Federal Applicable Rate (long-term) of 4.05%, correct? <http://www.irs.gov/pub/irs-drop/rr-11-13.pdf> - June 2011 FAR Ruling Link The mortgage is structured thusly: purchase price: $149,000 Down Payment: $29,800 Original Principal: $119,200 Start Date: June 23, 2011 First Payment Due: Jule 23, 2011 Annual Interest Rate: 4.05% Periods Per Annum: 12 Late Penalties: None Monthly Payment: $572.52 I will be paying my own taxes and insurance rather than having the lender hold them in escrow. We are doing the note paperwork through the title company and it will also be secured by a deed of trust which will be registered with the county clerk. The lender will file a 1098 at the end of the year and I will list all interest payments on my itemized deductions on my annual tax return. So, essentially what I need to know is if that is all that I need to do to get my mortgage interest deduction. Is there anything else? Thanks so much. I'm buying my first home and it is all a bit overwhelming right now.