MI Benefits Borrowers – Now and Later
MI puts more people in more homes – and helps keep them there.
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Borrower-paid MI premiums are 100% tax-deductible through 2010 for eligible borrowers with adjusted gross incomes up to $100,000.*
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MI is safe and predictable. A single fixed-rate mortgage, insured by MI, allows borrowers to lock in a predictable long-term interest rate.
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MI is immune to rising rates. When the Prime Rate increases, the MI monthly payment stays the same.**
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Borrower-paid MI is cancellable. The Homeowners Protection Act (HPA) requires that borrower-paid MI be cancelled automatically once the borrower has paid down the loan to an LTV of 78%, based on the original value of the property. And MI may also be cancelled by written request of the borrower once the principal balance is paid down to 80% of the original purchase price.+ In addition, most lenders have simplified the process to allow borrowers in good standing to cancel mortgage insurance when the home’s current value, determined by an appraiser, has increased so that the loan-to-value (LTV) ratio of the property is 75% or less.
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MI is supportive. PMI offers a number of resources to assist borrowers in default and raise awareness of the alternatives to foreclosure. Learn about our Home Preservation Program and HomeSafePMI.
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MI is flexible. PMI offers a range of payment plans to help lenders meet their borrower’s needs – such as annual, monthly, and single premiums.
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MI is easy. Borrowers have just one loan, one payment.** No “balloon” surprises down the road.
*Based on transactions closed in 2009-2010 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. †Subject to the federal Homeowners Protection Act and applicable state law. |
