PMI Makes changes to tax deductibility!!!

Real Estate Agent with Re/Max Xecutex
For the 2007 tax year, the Congress is allowing Mortgage Insurance to be TAX DEDUCTIBLE for families with ADJUSTED GROSS INCOMES (AGI) up to $109,000!! (To get full credit for the PMI, the borrowers' AGI cannot exceed$100,000; the eligibility is reduced by 10% up to a max AGI of $109,000)

Remember, this is AGI, which means that borrowers with householdunadjusted gross incomes possibly as high as $125,000 can qualify forthis benefit!!Why is this important?? In recent weeks, the rates, and cost, forsecond trust financing has skyrocketed, due to investor worries aboutincreased levels of foreclosure. These second trust products are not as attractive to the buyers in the current market. With PMI becomingtax deductible, your buyers can benefit by still achieving a low/nodownpayment, keeping total payments lower, only having one payment tocontend with, and getting the expanded tax benefits for having to payPMI, which serves to reduce their overall annual housing expense burden.

Comments (3)

Nick Bohn

You guys are right! This creates a great opportunity for new homebuyers and expands financing options to all purchasers. In the past we lenders have always had to find ways to avoid the costly MI because there was NO advantage to the buyer. The common practices have been either an 80/20 or Lender Paid Mortgage Insurance, which increases the interest rate over the life of the loan. Because MI would now be tax deductible in certain situations we can easily put a borrower in a single conventional loan up to 100%. In some cases though Lender Paid Mortgage Insurance is still the less expensive route monthly and still provides full deductibility because the MI is priced in to the actual interest rate.

 Thanks for your time reading this

-Nick Bohn

Jan 17, 2007 02:39 AM
Barb & Jennifer White
Re/Max Xecutex - Centreville, VA

Thanks Nick for the insight..


Yasir Malik 

Jan 18, 2007 07:01 AM
James Brennan
ES Group - Washington, DC
JD/LLM, 1031 Exchanges

Good stuff!

 Can you send me more info on this:




Jan 20, 2007 02:35 AM