RISMEDIA, Dec. 21, 2007-The U.S. House of Representatives voted to help many troubled homeowners and potential home buyers looking for an affordable mortgage, making mortgage insurance premiums tax deductible for all mortgages originated for the next three years. The Senate passed this legislation last week by unanimous consent. Mortgage insurance first became tax deductible in 2007.
“This is an important step forward as Congress seeks solutions to the current housing and mortgage crisis. Many potential buyers can’t make a traditional 20% down payment, and a loan with tax deductible mortgage insurance may make the difference in their ability to become homeowners safely,” said Kevin Schneider, president of the U.S. mortgage insurance business for Genworth Financial, Inc. Schneider is also the president of the Mortgage Insurance Companies of America (MICA), the industry trade association.
Mortgage insurance makes it possible for buyers without a 20% down payment to finance a home with a single fixed-rate mortgage which will not reset to higher interest rates in the future. Using mortgage insurance, home buyers with a small down payment can avoid the risks associated with combo loans, which are beginning to cause problems for many. In addition, the insurance is cancelable once a homeowner builds 20% equity in their home.
Mortgage insurance is available through private mortgage insurance companies, and through government programs (Federal Housing Administration, Rural Housing Service, and Department of Veteran Affairs).
“On average, this annual tax break amounts to $350 per taxpayer. That’s cash in the pockets of hard working homeowners,” said Schneider. Homeowners with adjusted gross incomes of $100,000 or less can deduct the full cost of their mortgage insurance premiums under the new legislation. Families with incomes between $100,000 and $109,000 are eligible for a reduced deduction.
For more information, visit http://www.genworth.com.
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