Private Mortgage Insurance is now tax deductible

One more good reason to make MI an option! The President has signed into law a bill making mortgage insurance premiums tax-deductible.

• Mortgage insurance premiums will be 100% deductible for households whose adjusted gross income is $100,000 or less.
• The law is effective for the 2007 tax year on purchase and refinance loans closed on or after January 1, 2007.

Financing with MI simplifies the mortgage process for your borrowers, increases their buying power, broadens their cash-flow options and allows for tapping into equity and refinancing more easily.   

FAQs

Why is mortgage insurance now tax-deductible?
Congress recently passed legislation that allows mortgage insurance premiums to be tax-deductible on purchase and refinance loans closed on or after January 1, 2007.

Who is eligible for the MI deduction?
Borrowers with household adjusted gross income of $100,000 or less purchasing a home in 2007 will be able to deduct the full cost of the mortgage insurance they pay during the 2007 tax year.

How does the MI tax deduction work?
Just as your interest payments on your mortgage are tax-deductible, reducing your overall taxable income, you will now be able to deduct the mortgage insurance portion of your payment as well.

What is the lender’s responsibility?
To provide the borrowers with a year-end statement reflecting total mortgage insurance premium paid.

How much of the MI premium can be deducted?
Borrowers with household adjusted gross income of $100,000 or less will able to deduct the full cost of the mortgage insurance they pay during the 2007 tax year.