Mortgage Insurance Premiums Now Deductible
If you're looking for a home and you don't have a good downpayment, there is good news for you: any mortgage insurance that you have to get (whether private or government) will now also be tax deductible.
In an article on PRNewswire.com, there is good news for the prospective home buyer: if you don't have much downpayment and need private or government mortgage insurance, you could qualify to deduct this cost from your income tax! This new deduction will only apply to home loans that close in 2007, so it's just in time for the spring home-buying frenzy. (Keep in mind that we're yet to see whether the regular spring spike in home sales will happen; there's still a substantial glut of new homes on the US market. There's no glut per se of resale homes, but that could be due to people waiting for a more favourable market to sell their homes.) For families that qualify for the deduction, the tax savings could be as much as $350 a year.
This could make buying a home even more attractive.
Do you qualify for this tax break? Well, if your adjusted gross income is less than $100,000, you certainly will! If you get private mortgage insurance, your premiums will be fully tax deductible. If you have income up to $109,000, you can still qualify for a reduced deduction. In fact, this deduction will also apply to people who refinance in 2007, so if you need to get a new mortgage, your timing couldn't be better.