Mortgage Insurance Deduction Extended
Congress Extends Tax Deductibility of Mortgage Insurance through 2016
Primary Residential Mortgage Inc. can help qualify borrowers for the homes they want or to help homeowners acquire the refinancing they seek.
Congress extended, last month, the Mortgage Insurance Tax Deduction. The MI Tax Deduction can help more borrowers by reducing the premiums on mortgage insurance. And the extension will now allow taxpayers to claim the deduction back to Jan. 1, 2015.
The MI Tax Deduction legislation provides full or partial deductions on insurance premiums for borrowers with an adjusted gross income of $109,000 or less, on homes purchased or refinanced between 2007 and 2015.
A full deduction of the mortgage insurance premium is available for borrowers with an adjusted gross income of $100,000 or less. Reduced deductions are available for incomes between $100,000 and $109,000. This can result in deductions ranging from $200 to $400 a year.
The recent legislation keeps the deduction available for qualifying US taxpayers through 2016. The legislation passed in December 2015, extending the qualifying period, now allows taxpayers to claim the deduction on their premiums back to January 2015.
Congress created the tax deduction for private mortgage insurance in 2007 and has extended it every year since.
It’s not unusual for lenders to require home buyers purchase the insurance. Mortgage insurance is also provided by the Veterans Administration (called a funding fee), the Federal Housing Administration, the Rural Housing Administration (called a guarantee fee), as well as private mortgage insurers.
In the case of a single up-front payment of the mortgage insurance premium, the December 2015 law extending the legislation allows for a portion of the premiums to be deductible in the first year and a portion in subsequent years.
Borrowers should consult their tax advisers or seek advice from a tax professional to understand how the legislation applies to their financial needs.
There were many other tax measures in addition to the MI Tax Deduction passed by the US Congress as the session came to a close in December 2015.
PRMI remains committed to keeping its real estate partners and borrowers informed on all of the varied financing opportunities available through our company.
Primary Residential Mortgage is located at 23131 Three Notch Road, Suite 201, California, MD 20619; (301) 737-0001.
To learn more about Primary Residential Mortgage in California, MD, visit their Leader Member Page.
