Is the interest that I pay on my reverse mortgage tax-deductible?

By , Posted on Sep 24, 2015

Yes but not until you pay off the full balance. This, you may notice is different from traditional, or forward mortgages simply because with a reverse mortgage you are not making monthly payments like you are with a regular mortgage. So, if you decide to make a payment or payments on your reverse mortgage the payments you make will be applied to the balance and will not be separated between the balance and the interest as it is in a traditional mortgage payment, again because you are not required to make regular payments.

As stated though, at the time that you have paid off the balance, be it through payments or a one-time payoff if you’ve sold the home for example, you will at that time be presented with the total interest that you have paid on the loan and that amount will be tax deductible. Just understand that if you make a payment no interest will be considered deductible. Only at the time you have paid the mortgage off in its entirety will you be able to claim the interest on your taxes the following tax year.

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