Real Estate Forums

Snapper56 · 12-15-2006, 07:30 AM

One more good reason to make MI an option! Congress approved a bill Saturday, Dec. 9, to make mortgage insurance premiums tax deductible.

Mortgage insurance premiums will be 100% deductible for households whose adjusted gross income is $100,000 or less.

The bill, awaiting a final signature, is effective for the 2007 tax year on loans closed on or after January 1, 2007.

Financing with MI simplifies the mortgage process for your borrowers, increases their buying power, broadens their cash-flow options and allows for tapping into equity and refinancing more easily. Now that it's tax deductible, you have one more good reason to make MGIC MI an option for them.
FAQs

Why is mortgage insurance now tax-deductible?
Congress recently passed legislation that allows mortgage insurance premiums to be tax-deductible on loans originated for transactions beginning Jan. 1, 2007.

Who is eligible for the MI deduction?
Borrowers with household adjusted gross income of $100,000 or less purchasing a home in 2007 will able to deduct the full cost of the mortgage insurance they pay during the 2007 tax year.

How does the MI tax deduction work?
Just as your interest payments on your mortgage are tax-deductible, reducing your overall taxable income, you will now be able to deduct the mortgage insurance portion of your payment as well.

What is the lender’s responsibility?
To provide the borrowers with a year-end statement reflecting total mortgage insurance premium paid.

How much of the MI premium can be deducted?
Borrowers with household adjusted gross income of $100,000 or less will able to deduct the full cost of the mortgage insurance they pay during the 2007 tax year.

Las Vegas Real Estate · 01-08-2007, 04:54 PM

The more we can duduct from our taxes, the better! I love new little extras like this one, becasue they simply make our jobs easier. When you mention to a client that they can duduct their commissions, closing costs, and now mortgage insurance, the sells sort of sells itself!

REMAX LV · 01-17-2007, 06:33 PM

I recently heard this news as well! I, for one, here in the Las Vegas real estate market have been telling all of my clients about this new occurance!

Snapper56 · 01-18-2007, 07:46 AM

The deductible MI story has been making news all over the place. But I will tell you folks that in today's market it is not necessary for anyone to pay MI. There are enough lenders that will get you through the MI period for a small interest rate bump. And unless your borrower is going to stay in the loan for a long period of time (the average is 4 years) it makes no sense to pay the higher premiums for MI.

Even now the some of the prime lenders have the option of adding a no MI bump to rates that keeps clients from having to pay MI.

One of the hardest things to talk about is that Interest Rates are not the most important thing to consider when looking at mortgages. The entire deal must make sense. Yet so many people are focused on the interest rate and on the settlement charges instead of what the ultimate goal of the mortgage.

Yes, all costs associated with a mortgage need to be considered. But the the one thing clients are not focused on is what the deal is doing for them.

Teach your clients to look not just at getting into a house. But to remember it is also an investment that needs to be monitored and watched and nurtured. It is not a payment every month.

Help them see this and you will sell more homes.