What is Mortgage Insurance?

San Mateo home buyers might be surprised to learn that PMI – Private Mortgage Insurance – may be deductible.  Like everything else there are restrictions.

What is Private Mortgage Insurance?

Home buyers who are putting a down payment of less than 20% of the purchase price of their home have to pay insurance; oftentimes not a tax deductible cost of home ownership.  PMI is the bank’s protection in the event that you default on your mortgage.

As part of the Mortgage Forgiveness Debt Relief Act of 2007, Congress allowed homeowners to deduct PMI premiums from their taxes. It was set to expire several times but is currently extended on home purchases that close by December 31st, 2011.

How Do You Qualify?

As part of the tax bill passed by Congress, mortgage insurance premiums will remain fully tax deductible for those with a household income of less than $100,000. Those with a household income of $100,000-$109,000 may be able to qualify for a partial deduction. The amount of the write-off is reduced by 10% for every $1000 over $100k.

Disclosure

I’m not a CPA, tax preparer or anything else related to taxes. So be sure to check with your tax expert to see if you qualify.

Vicki Moore About Vicki Moore

Office:
RE/MAX Star Properties
282 Redwood Shores Parkway
Redwood Shores, CA 94065

By Phone:
650.888.9268