One Step Closer To The American Dream

CONGRESS APPROVES LAW TO GIVE MANY HOMEBUYERS TAX DEDUCTION ON PREMIUMS FOR MORTGAGE INSURANCE

A new tax deduction will soon make buying homes more affordable by allowing many American homebuyers to write-off premiums for private and government mortgage insurance.

Congress has just passed a new tax deduction that allows qualified homebuyers to deduct mortgage insurance premiums from their federal taxes. This deduction is designed to help low- and moderate-income families, who must have a household income of $100,000 or less in order to qualify for the full tax deduction. Families with incomes of more than $100,000 and up to $110,000 will be eligible for a reduced deduction. The new tax deduction will be for qualified loans with mortgage insurance that close in 2007.

Homeownership tends to stabilize communities and give people more of a stake in the local and national economy. This new tax deduction encourages that trend, and helps people who want a piece of the American dream get there a little faster. As Congress looks for ways to help the housing market, private mortgage insurance deductibility should help a wide range of home buyers with incomes of $100,000 or less, including minority groups for whom homeownership rates are lagging. Many first time buyers cannot afford to put 20% down, and a loan with private mortgage insurance enables them to own a house for the first time.

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