Jan. 20, 2008 - Springime could be a little less taxing

Private Mortgage Insurance becomes deductible

In the wake of the President’s proposal, last week, to give tax payers a rebate this spring and with tax season looming only months away, you should know that Congress has made Private Mortgage Insurance (PMI) tax deductible for some. When less than 20% down payment is provided, PMI protects the lender, guarding against a situation in which a borrower defaults, leaving the lender unable to recover costs after foreclosing on the loan. The Mortgage Forgiveness Debt Relief Act of 2007 extends relief orinally provided by the Tax Relief and Health Care Act of 2006 through 2010 for home buyers meeting certain criteria.

This legislation typically helps first time buyers who fail to reach a down payment of 20% of the purchase price.  It is anticipated that homeowners will save a total of $91 million when they file their tax returns in 2008, according to estimates prepared by the mortgage insurance industry.

Read more about this subject in the Wall Street Journal, Online.