Quote:
Originally posted by Hurricane1
I am a new homeowner. I bought the house using an 80/20 loan so I did not put anything down and the sellers paid all of my closing costs. I ended up with 13.50 out of pocket at closing. No points were paid.
I am trying to figure out tax wise, what is/was deductible. I realize all interest is deductible....but how does that work? Lets say I will pay 12,000 in interest this year, what percentage is generally given back to me? Certainly not more than I paid in taxes and does this come back to me via federal or state taxes? If you could speak s-l-o-w-l-y (ha) I would appreciate a little breakdown in how this works.
Also, my home taxes are deductible?.?...
Thank you, in advance!! 
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All interest is deductible, and should be the amount on the 1098 received from your lending institution. I'm assuming that you didn't own a home prior to this one, otherwise there will be a difference.
The interest is included as an itemized deduction on Federal Schedule A. This has the effect of reducing your federal taxable income. And yes, real estate taxes are also a deduction, but these will be effected by your closing statement.
If you pay state income tax, usually (depends on the state) the itemized deductions for the state are pulled directly from the federal amounts, and are modified by any state taxes, so your interest paid will effect both federal and state taxable income.
Don't get confused with "mortgage payment" = interest. As with all loans, your payments (unless you got an interest only loan) consist of both principal and interest amounts. So you either need to run an amortization schedule yourself, or use the bank provided documents.