Mortgage Lending Evolves: PMI Now Becomes Deductible As Well
August 9th, 2007 by MG
Thanks to the Arizona Mortgage Guru (aka Shailesh Ghimire) for pointing me to this article. When going into a home mortgage with less than 20% down, you typically face paying Private Mortgage Insurance, or PMI.
Historically, this has not been deductible on taxes like normal mortgage interest is. When that PMI payment adds up to several thousands of dollars a year, that can be a big thorn in your side.
Well, it looks as if in 2007, PMI will be included with mortgage interest as a tax deductible item at the end of the year. Many in the business believe that this will be extended into the future as well. I’m inclined to agree.
Up until now, many lenders have been helping buyers with 80/20 plans where an additional loan is taken out at a higher percentage, in order to avoid PMI. With the recent changes in the mortgage market and several lending products falling off the radar for potential buyers, this will be one small helpful bonus to buyers who need the maximum tax advantage in order to afford their home.
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Hey MG,
Great blog. Love the content. Thanks for the reference.
I didn’t mean to imply that the deductibility would be extended. I really don’t know. I don’t want to mislead your readers.
Thanks for dropping by my blog!
Shailesh
Oops, great catch! I meant to reference the quote, “Almost every company in the business I talk to says this deduction will almost certainly be extended.” Thanks for the heads-up