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Some Better News About Private Mortgage Insurance (PMI) !

February 10, 2013 at 9:25 am By

Private Mortgage Insurance (PMI) is a necessary evil when you borrow more than 80% on a Conventional loan. But in 2007 the Govt. passed the Mortgage Forgiveness Debt Relief Act which allowed PMI to be tax deductible if you fit certain income criteria.
Unfortunately that Rule expired in 2011 which meant in 2012 homeowners couldn’t write off PMI as a tax deduction.
Well, the good news is that The American Taxpayer Relief Act of 2012 extended the 2007 Rule , even making it retroactive so folks who paid PMI in 2012 could go back and claim it on their tax returns when filing in 2013!
Secondly, the (qualified) deduction is extended through 2013 (again subject to some restrictions).
What To Do? :
(i) make sure you speak to your Tax Advisor about including MI as a deduction for tax year 2012 when you file this year.
(ii) If you’re considering FHA financing, think again and speak to your Loan Officer about how to go Conventional with cheaper PMI than FHA.

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