Mortgage Insurance - a good thing?
by Kaushik Sirkar, Chandler REALTOR®
Chandler AZ Real Estate
Most of us are aware of the recent legislation which changed the way the IRS views mortgage insurance. In 06', mortgage insurance became tax deductible. I saw a fairly big rush of lenders and Real Estate Agents make the case to their clients and prospective clients that this was a good thing.
An article that I just read on Inman suggests otherwise. The author suggests that this was an example of 'poor public policy'. That in effect, this piece of legislation de facto creates an incentive for prospective homeowners to put down LESS money. I believe that the author is suggesting we do whatever we can to promote larger downpayments as these serve as cushions when homes aren't appreciating at XY % per year.
Another point the author makes - why is there such a limitation as to income levels and why is this deduction ONLY permitted in tax year 2007?
I'll be honest - when this came out, I probably thought it was a good thing...at least likely not a bad thing. And until reading this article, I didn't think too much about it.
I pose a question to all AR members, and specifically to some of my favorite lenders, Brian Brady, George Souto, and Jeff Belonger what are your thoughts on this issue? For or against the tax deductibility of mortgage insurance?
Thanks for Reading :)
Kaushik Sirkar, Chandler Realtor®