PMI - The New Rules

PMI or Private Mortgage Insurace is a way for lenders to protect themselves in higher risk loans. PMI usually kicks in when a loan is more than 80% of Loan to Value (LTV). There are alternatives to PMI but make sure you know of the new tax benefits that PMI allows on purchases or refis made after January 1, 2007.

The biggest deductions you get under the new PMI rules is when your AGI (adjusted gross income) is under $100,000 for couple files jointly or $50,000 for filing as a single person. You are then able to deduct 100% of the PMI you have paid over the course of the year. Above that amount then your deduction decrease by 10% for every $1000 AGI above the $100,000 or $50,000 cap. In other words, the deduction disappears for those couple who have a AGI above $110,000 or single filers above $60,000.

Mortgage Broker | What is PITI

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