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Purchase | Refinance | Home Equity
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Congress Extends Mortgage Insurance Tax Deduction Through 2010
Congress has extended for allowing a tax deduction for mortgage insurance you pay on your
home loan good through 2010. Buyers having less than 20% down can continue to reap the tax
benefit on their monthly mortgage insurance payments.
Mortgage Insurance premiums are based on your loan amount, amount of down payment and
your credit score.
MI Tax Deduction Important Notes
1) The original tax deduction applies only to mortgages closed in 2007. If you have a loan
that has mortgage insurance closed prior to 2007 you would have to refinance the
loan to allow the deduction.
The extension passed by Congress extends the deduction to include homes purchased before
the end of 2010.
2) There are income limits to the deduction. You get the full deduction if your Adjusted Gross
Income is a 100,000.00 or less. The amount you can deduct phases out significantly after that,
and no mortgage insurance is deductible if you make more than 110,000.
3) If you take standard deductions instead of itemizing deductions, this new law
does not make a difference for you.
Most homeowners use itemizing rather than standard because it allows you to
deduct the mortgage interest and real estate taxes paid. Generally speaking the mortgage
needs to be at least 130,000 for itemizing to make financial sense.
Finally, consult with your tax accountant to make sure you can fully take advantage of this new
tax law.
Chicago Illinois Home Mortgage Lender