Scott Storace - Branch Manager, 100 Pacifica Drive Ste. 140, Irvine CA 92618 NMLS #226339 949.973.0141

"From the minute you call me to the minute we close, I have your back. No hassles, no banker’s hours & quick response times." - Scott Storace

  • Home Loans up to $3,000,000
  • Interest Rate Float Down Option
 

Have Questions? Call 949.973.0141

Mortgage Insurance Is Tax Deductible Once Again

Mortgage Insurance Regains Tax Deductible Status

Mortgage Insurance Regains Tax Deductible Status

Orange County, CA – Great news – the American Taxpayer Relief Act of 2012 is continuing a mortgage law which originally petered out at the end of 2011. Mortgage insurance will once again be tax deductible for those eligible.

Mortgage insurance describes an insurance policy which gives the lender of a mortgage an element of protection should the borrower default on their loan. When a homeowner stops making payments the bank takes a loss. A mortgage insurance policy protects against this. When default occurs, the company insuring the mortgage pays a claim to the entity providing the loan.

If you have one loan with an LTV of 80% or less, a VA mortgage, A USDA mortgage or a jumbo loan you don’t have to pay mortgage insurance. But for many other people, mortgage insurance is an unavoidable part of owning a home.

The law covers the fiscal years of 2012 and 2013. This means that you can deduct your 2012 mortgage insurance payments despite the fact that this rule expired over twelve months ago.

The American Taxpayer Relief Act of 2012 allows borrowers with itemized tax returns and adjusted gross incomes of less than $100,000 per year to claim back 100% of their mortgage insurance premiums on their federal income tax filings. The deduction gets phased out for people with adjusted gross earnings above $100,000. It is reduced 10% for every $1,000 earned over $100,000. Therefore, there is no deudction for those with AGE’s above $110,000. All mortgage types are available for tax deductions too – conventional or FHA.

Factoring in these deductions may well mean that you, as a home owner, can afford higher repayments once you’ve taken away the tax deductible portion of your monthly payments. In real terms, your monthly cost is going to drop…at least in the short term.

It’s a complicated calculation for some, and your personal circumstances are likely to dictate just how much money you can save. The best course of action is to talk to us about your situation. We’re happy to help, and you might end up saving a significant amount of money.

Scott Storace

If you like this post please share it!

Comments are closed.