PMI May Be Tax Deductible
Check out the attached article. The House and the Senate have passed the Tax Relief and Health Care Act of 2006. What does that mean to homeowners? Buried deep in the bill is a provision to make Private Mortgage Insurance (PMI) tax deductible. What is PMI? Private Mortgage insurance is insurance for the bank. Unless you have 20% for a down payment, most lenders will require you, at your expense, Private Mortgage Insurance. This insurance serves no benefit to the homeowner. It only benefits the bank. It's insurance that will cover any loss to the bank in the event of foreclosure. The hook? It is usually an additional $150 to $175 per month, on top of your monthly mortgage payment. AND it is not tax deductible. Well, those days may be numbered. The Act's next stop is the presidents desk. If he determines that PMI should be tax deductible, you'll see more and more loan programs to maximize this benefit to borrowers.
