When can you deduct mortgage interest? (This applies to both a first and second home):
1. You must have title.
2. The mortgage must be in your name (or have your name on it).
3. The home must secure the mortgage (or it is not home mortgage interest).
4. You must make the mortgage payments with your money.
Sometimes the last item can be accomplished with gifts, but know these rules before getting a mortgage, so you actually can deduct the interest.