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Congress Makes PMI Tax Deductible Main Boise Home Loans
Did you know that Private Mortgage Insurance (PMI) payments on your new mortgage loan can now be deducted on your income taxes? This "expensive" mortgage add-on isn't really so expensive!

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Dear BuildingCredibility.com visitor:

 

The new Private Mortgage Insurance legislation is fantastic news for the Real Estate Industry!  The bill, which went into effect on January 1, 2007, makes Private Mortgage Insurance (PMI) tax deductible for new borrowers who have adjusted gross income less than $100,000.

 

So, what really is Private Mortgage Insurance?  PMI is designed to protect the lender from a default and foreclosure, and is required on most prime loans exceeding 80% of the property's sales price or appraised value.  Before this legislation was passed, PMI was primarily viewed as unfavorable because of the perception that it was too expensive and not tax deductible.  In the 1990's, lenders began allowing piggyback loans, which meant that borrowers could purchase new homes without PMI.  In this situation, a borrower would take out two loans to cover the total amount of financing that was needed.  The first mortgage was usually for 80% of the financing; the second mortgage, the piggyback, was to cover the rest of the funds needed for the loan.

 

With Congress stepping up to the plate and passing this legislation, borrowers may want to reconsider PMI.  You may not be aware of this, but the presence of PMI on a loan makes an approval much easier to attain when you prequalify for a new loan.  Remember, the PMI makes your loan much more attractive to lenders because they are insured in the case that you default on your mortgage.  And, with the recent swing in the mortgage industry that is being pushed by the subprime mortgage meltdown, it is very possible that the same borrower who CANNOT qualify for an 80/20 piggyback purchase loan WILL qualify for one loan with 100% financing and the presence of PMI.

 

So, what should you do now?  Whether you are considering purchasing a new home or refinancing to restructure your finances, the first thing is to call a mortgage professional.  There are a huge number of options to consider, well beyond what I have discussed here in this blog.  Also, you should contact your accountant or tax preparer to get additional information on this exciting legislation.

 

If you would like to discuss how you can take advantage of the benefits of PMI, feel free to contact me, or any of the other loan professionals, at Millennium Mortgage & Insurance, Inc. in Nampa.  Our office number is (208) 880-0316, or you can locate us on the web at http://www.millennium-mortgage.com/.

 

Regards,

 

 

Eric Leigh, Senior Loan Officer

Millennium Mortgage & Insurance, Inc.

 
Posted by Eric Leigh at 5/16/2007 8:09:00 PM
Comments (2)
Re:Congress Makes PMI Tax Deductible
What is the PMI on a $200,000 loan?
Posted by on 5/16/2007 12:56 PM
Re:Congress Makes PMI Tax Deductible
It completely depends on your loan-to-value (LTV) and your credit score/risk. If you give me a call, I can estimate it for you with more information. All my contact information can be found on my personal website at http://www.ericsloans.com.

Eric
Posted by Eric Leigh on 5/16/2007 2:28 PM
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