No matter how you slice it,
MI is a wise choice.
Especially now that it's tax-deductible through 2010!
Mortgage insurance (MI) has always been an easy, safe and affordable way for homebuyers to purchase a home with less than the traditional 20% down payment. And now it’s even more appealing thanks to the federal law extension that allows eligible borrowers with adjusted gross incomes up to $100,000 to deduct 100% of their 2009-2010 borrower-paid MI premiums on their federal tax returns*.
The law is effective for transactions closed in 2009-2010. MI premiums paid in those years may qualify for tax deductibility on borrowers’ federal tax returns as follows:
- Borrowers with adjusted gross incomes up to $100,000 may deduct 100% of their 2009-2010 premiums.
- Deductions are phased out in 10% increments for borrowers with adjusted gross incomes between $100,000 and $109,000.
When determining loan options that best meet your borrowers’ individual needs, make sure to consider the following benefits of a loan with MI:
- MI premium payments are fixed and unaffected by rising interest rates
- MI is cancellable if borrower-paid**
- Helps preserve access to future home equity
- Both loan interest and borrower-paid MI premium may be tax-deductible!
“The extension of this federal law has the potential to help thousands of low- and moderate-income Americans secure affordable mortgages that keep them in their homes and keep their communities strong.”
Steve Smith,
Chairman of the Board & Chief Executive Officer of The PMI Group, Inc.
* Based on transactions closed in 2009-2010 and borrower-paid MI premiums allocable to those years.
** Subject to federal Homeowners Protection Act and applicable state law.
PMI cannot provide tax advice. Taxpayers should consult their own tax advisors concerning applicability of this new deduction to their particular circumstances under the Internal Revenue Code and the laws of any other taxing jurisdiction. This information is not intended or written to be used, and it cannot be used, for the purpose of avoiding U.S. federal, state or local tax penalties.
