e have seen numerous is tax-deductible for a borrower
examples in which so long as two qualifications are
mortgage insurance is a met:
more cost-effective alternative
to a second mortgage. Many Saint 1-Household income for the
Louis MO home buyers select the borrower is $100,000 or less in
wrong loan program as they are 2007
misinformed about mortgage
insurance. 2-The residential loan is secured
against a primary or secondary
Home financing can be complicated residence
enough, but the Federal
Government has done its part to The deduction is phased out for
add to the complexity The Tax households earning more than
Relief and Health Care Act of $100,000. The phase out is at a
2006 provides for new tax code rate of 10% reduction per $1,000
that has implications for Saint of additional income. The
Louis MO homeowners. deduction is completely phased
out at $110,000. So, for a
The act specifically addressed non-married single homeowner who
itemized deductions for earns $90,000 in 2007 and buys a
government mortgage insurance home utilizing a loan program
(MIP) as well as private mortgage with Mortgage Insurance (MI), the
insurance (PMI) premiums paid MI expenses would be
during 2007. tax-deductible in 2007.
For all residential loans Ah, but like many things, there’s
initiated during the 2007 a catch! The new tax code was
calendar year, qualifying private enacted for a finite period of
and government mortgage insurance time and is due to expire
December 31, 2007. Unfortunately, determine which residential loan
until the act is extended, there product is the most suitable.
is no guarantee that MI will be This is especially important
tax-deductible in 2008. given the "temporary" status of
the mortgage insurance
For borrowers, without deductibility. The mortgage
deductibility, mortgage insurance interest deduction applies to
was a fairly expensive option FHA, VA and conventional loans.
when compared to second mortgages
(i.e. HELOCs - home equity lines
of credit). Post August 2007,
with the market for second mortgages becoming smaller and type="text/javascript">
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