Some GOOD News for a Change
Mortgage Insurance (PMI) continues to be tax-deductible through the year 2010. Since 80/20 loans are now just about obsolete, a ONE loan with PMI is a excellent way for borrowers to purchase a home with essentially NO MONEY DOWN.
- Households whose adjusted gross income is $100,000 or less can deduct 100% of their MI premiums. (The deduction is reduced by 10% for each additional $1,000 of adjusted gross income, phasing out after $109,000.)
- The deduction applies to "qualified residences," as defined in the Internal Revenue Code. Generally, that includes the borrower's primary residence and a "non-rental" second home. Investor properties are not eligible.
Borrowers should always consult with a professional tax adviser for details about MI tax deductibility.