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Tuesday, January 10, 2012

Mortgage Insurance Tax Deduction Out


In the process of haggling over a 2 month extension of the payroll tax reduction (which is increasing mortgage rates, see my Dec 30, 2011 posting), Congress failed to extend a number of existing tax deductions. One of those deductions that is no longer in effect is the deduction for mortgage insurance.

When a home buyer puts less than 20% as a down payment, they have to pay a mortgage insurance premium. Mortgage insurance is a policy that pays the lender a claim in the event a borrower defaults on the loan. Up until midnight on New Years Eve, that premium was tax deductible.

Congress may extend the deduction and make it retroactive to the beginning of the year. But many of the tax deductions are considered bad policy by tax experts and may not be in favor. So for the time being, mortgage insurance is not a tax deduction.

8 comments:

  1. This comment has been removed by a blog administrator.

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  2. Thanks for such valuable information on this blog. Please keep updating with new info!


    Australian Expat Mortgage

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  3. Really? What a very good news, huh? =) But, I think it would be more helpful to consult a tax advisor or CPA for this matter. It’s safer to seek advices from tax professional for guaranteed information.

    Randy Robinson

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  5. Hats off for this informative blog. Keep posting.

    income tax Montreal

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  6. This is a good news for first time home buyers, when Mortgage insurance tax deduction will remove and this will help them save more investment and protect their house from foreclosure.

    Buy to let mortgage advice

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  7. thanks for the useful article. i agree with Randy. i believe that it s always worth consulting a professional when it comes to talk about taxes. However, I've found an ebook that gives you an overall idea of where we currently stand in the real estate cycle. it s free so you might want to have a look. http://phillipjanderson.com i've personally found it very useful.

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