Deducting (PMI) Private Mortgage Insurance

Homeowners are usually well informed about the home-related tax deductions that they can make at filing time. However, when purchasing a home, other costs can quickly accumulate. For buyers who can’t come up with a 20% down payment on the purchase price, they will have the added cost of private mortgage insurance (PMI).

The PMI is a policy that is taken out by the homebuyer to protect the lender against possible default on the mortgage loan.

PMI is Tax-Deductible

This income tax deduction was developed as an element of the Tax Relief and Health Care Act of 2006 and was initially added to private mortgage insurance (PMI) plans issued in 2007.… Read the rest