Congress has finally made it around to passing legislation making PMI tax deductable in some cases. Here are a few of the main points:

Why is PMI insurance now tax-deductible?
Congress recently passed legislation that allows mortgage insurance premiums to be tax-deductible on loans originated for transactions beginning Jan. 1, 2007.

Who is eligible for the PMI deduction?
Borrowers with household adjusted gross income of $100,000 or less purchasing a home in 2007 will able to deduct the full cost of the mortgage insurance they pay during the 2007 tax year.

How does the PMI tax deduction work?
Just as your interest payments on your mortgage are tax-deductible, reducing your overall taxable income, you will now be able to deduct the mortgage insurance portion of your payment as well.

What is the lender’s responsibility?
To provide the borrowers with a year-end statement reflecting total mortgage insurance premium paid.

How much of the PMI premium can be deducted?
Borrowers with household adjusted gross income of $100,000 or less will able to deduct the full cost of the mortgage insurance they pay during the 2007 tax year.

tags: mortgage insurance, pmi, tax deductable, taxes