Question:

Is there mortgage insurance tax deductibility?

Answer:

Currently, mortgage insurance tax deductibility is available through the year 2010. Mortgage insurance had not been tax deductible up until 2007 and until then people fell back on various tricks to avoid paying PMI.

They used piggyback loans - 80/20 or 80/10/10 - with second mortgages or home equity loans or lines of credit to provide the down payment. Or, they used seller gifts through grant programs to provide the down payment. Or signed up for specific government programs that qualified them for down payment assistance.

As of now, mortgage insurance tax deductibility is available in full for those with income equal or less than $110,000. Those with higher income get prorated tax deductions that have to be consulted with tax advisor to be calculated correctly.

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