February 17, 2008 

In late 2006 Congress passed a law allowing a rather strange one-year deduction of premiums for private mortgage insurance (PMI). This was a scrap thrown to PMI insurers who had been complaining that their businesses were suffering from the number of homeowners opting for piggyback mortgages. These simultaneous second mortgages were used for a house down payment, eliminating the need for PMI and providing an additional mortgage interest deduction.

This deduction required that the policy be taken out and paid for in 2006 (tough luck for homeowners struggling with premiums from earlier years,) was for home acquisition not refinancing, and the deduction was available for 2006 only. Now this deduction has been extended for 2007 provided that the PMI contract was entered into in 2006 or 2007 and that payments for the more recent year were made before 2008. PMI premiums are treated as mortgage interest on Schedule A so taxpayers must itemize in order to claim the deduction and the taxpayer's gross income must be under $50,000 for an individual or $100,000 for a couple filing jointly.

A portion of this deduction may be available for higher earners; again, consult the regulations or your tax advisor.  If you need a good local advisor/CPA contact David Nilsson at www.oceanviewcpa.com. David is on the Board of Directors of the Bethany- Fenwick Chamber of Commerce.

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Jeff Baxter - Prosperity Mortgage - Bethany & Rehoboth Beach, DE

My Website - Email:  jeff.baxter@prosperitymortgage.com

 

 

 

 

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Jeff Baxter

Bethany Beach, DE

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Prosperity Mortgage

Address: 33298 S. Coastal Highway, Bethany Beach, DE, 19930

Office Phone: (302) 537-5076

Cell Phone: (302) 602-1067

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Thoughts on the mortgage market and the Delaware Beach (Bethany Beach, Rehoboth Beach, Fenwick Island, Dewey Beach, and Lewes).


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