Why MI?
All mortgages carry risk. High loan-to-value loans carry more. Mortgage insurance reduces that risk by protecting the lender. Equity in the home reduces that risk by committing the borrower.
Back-to-basics…because equity matters.
For those customers who can’t make the full 20% downpayment, there’s one financing approach that offers benefits to lender and borrower alike. It’s a back-to-basics formula:
MI + Equity = Lower Rate of Default
Why MI?
Simply put, MI is the most secure way to help borrowers qualify for homes sooner. MI also helps lenders mitigate exposure, reduce volatility and strengthen their portfolios. On the borrower side, MI makes possible a range of safer and more secure loan structures. Plus, borrower-paid MI premiums are now tax-deductible for qualified borrowers through 2010.*
Why equity?
The fact is, everyone benefits when borrowers have some equity in their homes. By making a downpayment, borrowers are statistically more likely to become successful homeowners.
*Subject to restrictions under the Internal Revenue Code. MI tax-deductibility is based on transactions closed in 2007-2010 and borrower-paid MI premiums allocable to those years.
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.
