My then-boyfriend, Jake, and I bought a house and moved in on December 23, 2013. The house cost $114,000 - my dad gifted us $20,000 and Jake's parents paid the other $94,000. We are paying his parents 3% interest on $74,000 on a 30 year "mortgage" (we will owe them the other $20,000, but they are not charging us interest on it).

Jake's uncle is a CPA and was the one who suggested we pay them interest, otherwise they would be charged for gifting us so much money. He does taxes for the whole family, including me. Jake and I were surprised when he owed on taxes last year because, from what we've heard, you're supposed to get a tax break when you buy your first home. To reduce the amount he owed, Jake's uncle suggested he put money in a retirement account, which Jake did ($1,500).

I am currently taking an economics class and learning about the time value of money. It has come to my attention that you're better off if you take out a loan and write off the interest, rather than paying for the house in full (like we did).

My question is - is the loan we have with his parents considered a mortgage? Should his uncle be writing off our interest payments? I hate to bother his uncle during this time of year, because I know how busy he is. I also don't want to offend him, because he does our taxes for free. Any help would be appreciated! Thanks!