December 2006 - Congress has finally passed a law that now makes mortgage insurance premiums (those insurance cost in your payment because you put less than 20% down at closing) tax deductable as long as your adjusted gross income is under $100,000. Economists estimate that this one law change will save Americans roughly $91 million dollars just in 2007.
What does this mean to you? Interest savings, tax savings, ect. Many loans will become much more competitive because many home borrowers opted for higher interest rates in lieu of mortgage insurance. What many failed to realize was that once they hit that magic 20% equity threshold their mortgage insurance could be dropped leaving them with lower payments while those who opted for the higher interest rates still have the same payments.
It should be noted that this law still needs to be approved by President Bush but there is no indication that he will veto it. It should also be noted that this law change is in effect for 2007 only and will require another act of congress to continue it in 2008 and beyond.
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