Question:

Did the deduction mortgage insurance bill pass?

Answer:

The deduction mortgage insurance bill was signed by President Bush and established deductibility of mortgage insurance through 2010 for families with income under $110,000.

The mortgage insurance deduction bill was signed first for loans originated in 2007. Loans signed before 2007 had non tax-deductible PMI and borrowers had to take combo loans to avoid paying mortgage insurance. No one knew whether the mortgage insurance bill would pass to continue with tax-deductible mortgage insurance.

Now, to support the housing market and homeowners with low to average income, private mortgage insurance will remain tax-deductible through 2010 for qualifying borrowers. The rest who can't provide 20% down payment will have to pay for PMI until 20% equity level is reached.

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