|
Borrowers who are closing loans in 2007 and who have annual combined household incomes of $100,000 or less now qualify to deduct the full cost of their mortgage insurance premiums on their federal tax return, according to a press release from the U.S. government. This legislation was passed by Congress and signed by President Bush in late 2006.
For homebuyers, this law helps to increase their buying power, simplify the mortgage process, create easier refinancing opportunities and broaden their cash-flow options.
Experts say that a mortgage insurance deduction will serve as an option to taking on a "piggyback" loan to cover a 20% down payment. The new law is expected to save nearly 1 million Americans a total of $91 million when they file their tax returns in 2008.
As this article goes to press, the law has one hurdle to cross: The IRS still has to issue regulations that interpret the law. Therefore, it is highly recommended that you always advise your clients to talk to a tax professional before filing their taxes.
|