Our good friend and a frequent client choice for home loans, Andy Deutschle of Strategic Mortgage, brought the passage (December 19, 2007) of this legislation to our attention. It extends the tax deduction for mortgage insurance beyond the end of 2007 when it was scheduled to expire.
This is how he tells it…
At a time when homeowners need relief most, Congress has taken another big step to help by extending legislation that makes mortgage insurance payments tax deductible for many homeowners. The tax legislation, originally approved in December 2006, pertained only to loans closed in the 2007 calendar year. With this renewal, there are three important points to note:
The tax deductibility extension is for three more years (through 2010). After that, it will have to be renewed again for existing homeowners to continue to deduct premiums and for new borrowers to take the deduction.
The specifics of the legislation will remain the same. Borrowers whose annual adjusted gross income is $100,000 or less can deduct their MI premiums from their 2007-2010 federal income tax returns for homes purchased or refinanced during this timeframe. Those with incomes between $100,000 to $109,000 are eligible for a reduced tax break under the law.
Deducting the cost of MI on federal tax returns is estimated to save borrowers $200-$400 each year.
Thanks, Andy! And Merry Christmas to you all!