Congress Makes Mortgage Insurance payments tax deductible for 2007.
At a time when some homeowners need relief most, Congress has extended legislation allowing homeowners to deduct private mortgage insurance payments. When obtaining a home mortgage, borrowers who put less than 20% down are required by the lenders to take out this type of insurance. This insurance is for the benefit of the lender, not the homeowner and is paid monthly until there is 20 % equity in the property at which time the premiums may be dropped. That can, however, take quite a long time, especially when values are not appreciating or even falling.
The tax legislation, originally approved in December2006, pertained only to lands closed in the 2007 calendar year. With this renewal,there are three important points to note:
The tax deductibility extension is for three more years (through 2010). After that, it will have to be renewed again for existing homeowners to continue to deduct premiums and for new borrowers to take the deduction.
There are specific guidelines concerning annual income in order to determine who is eligible and at what level for this tax break. Consult your tax professional for more details. I also have additional details on the specifics of this legislation that I can provide to you. Please contact me if you want more information.